FMG - Fortescue Ltd

[finicky]

? Bouncy bouncy calls are at the apex of my system and only appear on rare (even grand) occasions. As such I cannot promise that such a call will occur again within our lifetimes (sadly)

 

[qldfrog]

but seriously, is that greenwashing infection? world as it was 2 days ago, Cold war 2 going on, Iron ore as plentiful in 2021 than it was 50y ago or will be in 50y, China reducing its building program..
No real reason to pop the champagne yet IMHO

 

[Garpal Gumnut]

Good ole Dr. Twiggy.

Over $16 now and with a few gaps to be filled it is possible it may hit $20 before the end of the month/next week/day/hour.

It would appear FMG is a Green Company now with earnings from a turnaround in Fe futures coming in as well.

Everyone from Manhattan to Muttaburra will be poking a few kopeks in.

gg

 

[againsthegrain]

Good ole Dr. Twiggy.

Over $16 now and with a few gaps to be filled it is possible it may hit $20 before the end of the month/next week/day/hour.

It would appear FMG is a Green Company now with earnings from a turnaround in Fe futures coming in as well.

Everyone from Manhattan to Muttaburra will be poking a few kopeks in.

gg

slow and steady wins the race

 

[over9k]

Good ole Dr. Twiggy.

Over $16 now and with a few gaps to be filled it is possible it may hit $20 before the end of the month/next week/day/hour.

It would appear FMG is a Green Company now with earnings from a turnaround in Fe futures coming in as well.

Everyone from Manhattan to Muttaburra will be poking a few kopeks in.

gg

Again, china driven today too. Take a look at chinese markets and real estate developers.

 

[Sean K]

Any problems with FMG keeping their promises to fund FFI plans into the future?

They seem to be making a lot of future investments on the 10% of FMG projected earnings.

I remember saying at one point in this thread, or the IO thread, that the last time IO was at $60 (RBA long term price) that FMG was at $4. Lot's happened since then, and they're cashing in, but, I'm a bit vexed.

 

[Value Collector]

Any problems with FMG keeping their promises to fund FFI plans into the future?

They seem to be making a lot of future investments on the 10% of FMG projected earnings.

I remember saying at one point in this thread, or the IO thread, that the last time IO was at $60 (RBA long term price) that FMG was at $4. Lot's happened since then, and they're cashing in, but, I'm a bit vexed.

They plan is that each of the large FFI projects will be mainly funded through the sale of “green bonds” and other debt instruments, with FFI funding the equity component via their 10% profit allocation.

Most large infrastructure investments are funded this way, with several layers of financing.

Eg, An $1 Billion project might be funded by, $800 Million (80%) in green bonds or other debt, and $200 Million from FFI.

Let’s say the project once it’s operating returns a 10% return on invested capital, it would be producing $100 Million a year in gross profit.

If the bonds have an interest rate of 4%, then we have to send $32 Million to the green bond holders as interest, and FFI keeps $68 Million profit.

because FFI only invested $200 Million, the $68 Million profit represents a return on investment of 34%.

of course if the project fails FFI lose their $200 Million equity investment and the bond holders may lose some of theirs, but the financing won’t be secured by FMG, it will be non recourse debt, secured by the project itself.

 

[Value Collector]

When FMG and in particular Andrew were developing their first mine, port and rail infrastructure in the Pilbara they proved them selves to be very good and finding financing for their projects.

Not only did they convince bond holders to provide most of the finance, but also Chinese steel mills provided funding in the form of pre purchased Ore, meaning they paid up front for Ore that hadn’t even been proved up yet.

these pre payments helped fund the development, Telsa did a similar thing when they collected 400,000 $1000 deposits on the model 3, which that $400 Million was used to help fund building the model 3 factory.

there are lots of options in business if you are skilled at putting deals together, which Andrew is.

 

[basilio]

They plan is that each of the large FFI projects will be mainly funded through the sale of “green bonds” and other debt instruments, with FFI funding the equity component via their 10% profit allocation.

Most large infrastructure investments are funded this way, with several layers of financing.

Eg, An $1 Billion project might be funded by, $800 Million (80%) in green bonds or other debt, and $200 Million from FFI.

Let’s say the project once it’s operating returns a 10% return on invested capital, it would be producing $100 Million a year in gross profit.

If the bonds have an interest rate of 4%, then we have to send $32 Million to the green bond holders as interest, and FFI keeps $68 Million profit.

because FFI only invested $200 Million, the $68 Million profit represents a return on investment of 34%.

of course if the project fails FFI lose their $200 Million equity investment and the bond holders may lose some of theirs, but the financing won’t be secured by FMG, it will be non recourse debt, secured by the project itself.

Great simple explanation of how the FFI projects will be funded and the risks/rewards for FMG shareholders.

IMV a big part of Twiggy's public promotion of the various Hydrogen projects is aimed at the Super funds and Green investment groups that are looking for well managed, effective projects that can tackle CC in the heavy industry sector. The issue of how they will manage these investments is also addressed by FMG.

Sustainable Finance Framework​

Sustainable Finance Framework - Fortescue Metals Group (ASX:FMG)

Read the latest Periodic Report General news from Fortescue Metals Group (ASX:FMG)

www.listcorp.com

 

[basilio]

A slew of announcements and joint ventures by FMG in the past week. They have planning approval for their electrolyser factory in Gladstone. This will begin construction in Feb 2022 and be producing electrolysers in2023

Fortescue Future Industries (FFI) First Global Green Energy (GEM) Manufacturing Centre gets green light on planning approval | Fortescue Metals Group Ltd

www.fmgl.com.au

 

[basilio]

Also a joint venture with Universal Hydrogen in the US to produce hydrogen for aeroplanes and decarbonise aviation .

Under the Memorandum of Understanding (MOU) signed today, FFI and Universal Hydrogen have agreed to:

• Negotiate a global offtake arrangement whereby FFI will supply green hydrogen to Universal Hydrogen to power regional and other aviation sectors until 2035;
• Conduct a scoping study to develop green hydrogen production and logistics hubs in Iceland, New Zealand and Southeast Queensland; and
• Evaluate future green hydrogen demand in the aviation industry on a region-by-region basis to identify and promote green hydrogen adoption and uptake.

FFI and Universal Hydrogen join forces to decarbonise aviation | Fortescue Metals Group Ltd

www.fmgl.com.au

 

[basilio]

Finally another announcement attempting to drive and lead the shipping industry to reach net zero by 2040.

Fortescue Future Industries calls for net zero target for shipping by 2040 and announced a green ship at sea in 2022​

Fortescue Future Industries’ (FFI) Chairman Dr Andrew Forrest AO today called for a net zero 2040 target to be embraced by the entire shipping industry during an address for ‘Transport Day’ at COP26, while providing the technical leadership in large shipping to support the target.

FFI’s Green Fleet Team is moving quickly to convert the 75 metre vessel, the “MMA Leveque”, in collaboration with MMA Offshore Limited, over the next 12 months so it can run almost totally on green ammonia.

This brings the shipping industry much closer to becoming carbon neutral well before 2040 with only entrenched industry practices slowing global progress of carbon neutral shipping.

The MMA Leveque will run on green fuel and is part of Fortescue Metal Group’s broader fleet of trucks, locomotives and ships all undergoing technical transition to operate on green fuels.

Speaking from ‘Transport Day’ at COP26, Dr Forrest said, “This vessel will show the shipping industry the power of a vessel fueled by green ammonia in real world conditions.

“We are investing heavily in research and development to transform our trains, trucks and ships on the road, rail and sea with zero pollution fuels as soon as possible.

“It is world leading technology and will assist in providing the shipping industry with the practical knowhow to decarbonise completely.

Earlier this year, FFI’s Green Fleet Team achieved the successful combustion of blended ammonia fuel in a locomotive, paving the way to achieve a renewable locomotive operation using one hundred per cent green ammonia.

Fortescue Future Industries calls for net zero target for shipping by 2040 and announced a green ship at sea in 2022 | Fortescue Metals Group Ltd

www.fmgl.com.au

 

[basilio]

One of the interesting questions to consider with FMG's push into fast tracking green hydrogen and renewable energy will be allocation of capital spending.

For example the efforts to improve the cost structure of FMG's mining operation by eliminating fossil fuel cost in mining and transportation represents development programs for FFI but also capital investment projects for the mining operations. My guess is these costs will be subsumed in FMG's capital investment programs and end up representing a valuable component of FFI's green energy portfolio.

A very elegant solution IMV

 

[DrBourse]

Some Personal TA Observations that maybe of interest to FMG Punters - Note: I do NOT hold FMG atm.

 

[tech/a]

At last some sustained movement.
Very nice. I may join you longer term for a while @Value Collector

 

[Sharkman]

Some Personal TA Observations that maybe of interest to FMG Punters - Note: I do NOT hold FMG atm.

agree with your commentary, i saw resistance at $19 as well (looking back to aug '20 + mar '21 + the gap you highlighted seems like resistance turned support turned resistance), it's why i picked that strike to try threading the needle and finesse out some longer dated calls on the house back in late sept. i figured the Jan '22 contracts could give it sufficient time to blow thru that resistance level, or if it gets rejected there and stalls around that area with 2-4 weeks to expiry, it could be transformed into a call calendar (sell 2x Jan '22 $19 calls, buy 1x Mar '22 $19 calls) possibly taking in small credit and giving it a bit more time to break thru.

also agree with the basing, been selling $14 puts for the last few weeks (initially the weeklies, switched to the Dec monthlies after the big bullish candle on Nov 11 which left the weeklies too far OTM to collect any sort of meaningful premium). buying the stock straight up at $14 would've done better, but obviously that's with the benefit of hindsight. i opted for a repeated put selling strategy as i thought it would remain stuck in that $14-$15 range a while longer, i had the long $19 call position to cover the scenario where it did break out, and the market was offering solid IVs of around 50 - not bad considering those $14 puts were around 40-50 delta at the time - which i thought were conducive to selling gamma.

 

[DrBourse]

Some punters have expressed an interest in how I trade – Some others rubbished my earlier posts here in the “FMG Forum” and in my 3 “DrBourse Help for Beginners Forums”..


SO


For those interested parties, Here it is – And for those who are not interested, who gives a S#?t.


FMG’s ADR “FSUGY” was up 7.45% Overnight on the US Markets – So, after buying into FMG B4 Close 23/11 (see my previous post), it looks +ive for today, PROVIDED todays open is a Green Candle of $17.35 or better – The Gap Up Yesterday provides Minor & Major Support Lines - ST Ind’s, CCI MFI & LR are all looking good – Will have Sell Screens loaded and ready to go if the unexpected happens.

 

[DrBourse]

It's now 1 hour Since Open, I have been watching my normal Chart Template (above) and "Market Depth", and a "1 Day 3 Minute Candlestick Chart" in an attempt to gauge todays trend for FMG - Cannot see any reason to exit this trade yet.

This is the ceuuent Mkt Depth Stack.

Remember that FMG's Balance Sheet has been rated as Very Good and their IV has been approx $25.00 for the past 2 years.

 

[joeno]

some nice happy movements up holding for the long run. Like what FMG's been doing lately with green energy. Iron is a fundamental resource in modern society. There's no cars, computers, tall buildings without iron.

 

[DrBourse]

FMG SP is now $17.60, so 3001 shares purchased @ $17.35 gives me a Very ST profit of $690.35 or 1.33% - some Day Traders will exit when they have a $500.00+ Profit Magin, I will hold.

So there may be a ST pullback over the next hour or so.