FMG - Fortescue Ltd

[Value Collector]

It takes more energy to produce less hydrogen, until FMG are able to create more renewable energy than required to produce green hydrogen they will be looking at 'off the shelf' equipment to help bring their carbon footprint down so as to keep their promises and the market happy.



Easier to use renewable electricity to charge a couple of trains, while the science works out the hydrogen production & storage problems.

I agree, a battery powered train (just like a battery car) is a more efficient use of the electricity, hydrogen/green ammonia will be good for systems that have to operate away from electrical grids or for transporting energy internationally where the convenience of liquid fuel out ways the energy losses.

 

[spratty84]

Is anyone else going to participate in the drp this coming mid year reporting season. I am planning to participate for the medium term unless there is a major change for the worst as i missed out on those cheap years and only just bought a parcel when it was discounted a few months ago. I will definitely buy again when the opportunity arises and it will be interesting to see what the returns will be as i am hoping to build up a decent holding for my longer term divy portfolio.

 

[Wedgy]

It takes more energy to produce less hydrogen, until FMG are able to create more renewable energy than required to produce green hydrogen they will be looking at 'off the shelf' equipment to help bring their carbon footprint down so as to keep their promises and the market happy.



Easier to use renewable electricity to charge a couple of trains, while the science works out the hydrogen production & storage problems.

That is true, i guess the plan is to use renewables, solar and wind, when the sun shines and wind blows. It is a way of storing green energy when you can, even if it is using more energy than the energy stored. Of course I suspect they will use gas if they have to, to keep hydrogen/ammonia production plants running.

 

[divs4ever]

Is anyone else going to participate in the drp this coming mid year reporting season. I am planning to participate for the medium term unless there is a major change for the worst as i missed out on those cheap years and only just bought a parcel when it was discounted a few months ago. I will definitely buy again when the opportunity arises and it will be interesting to see what the returns will be as i am hoping to build up a decent holding for my longer term divy portfolio.

i bought some FMG in August and September 2021 but haven't applied to participate in the DRP yet ( the first parcel was carrying a div. )

i am still considering IF i should join , since i am already retired , the cash income is equally tempting compared to the increasing share-holding ( which would have had more appeal for me , if i was still in the 'accumulation phase ' )

i have a similar quandary over the BHP divs since they have recently implemented a DRP plan

IMO very much a personal choice on this

good luck

 

[againsthegrain]

I picked up a full drp parcel last divy, got my shares allocated at 18, yeah if I had a crystal ball would of taken the cash and loaded at 14 but easily said now. Still letting it ride for another full drp allocation on the coming divy

 

[Value Collector]

i bought some FMG in August and September 2021 but haven't applied to participate in the DRP yet ( the first parcel was carrying a div. )

i am still considering IF i should join , since i am already retired , the cash income is equally tempting compared to the increasing share-holding ( which would have had more appeal for me , if i was still in the 'accumulation phase ' )

i have a similar quandary over the BHP divs since they have recently implemented a DRP plan

IMO very much a personal choice on this

good luck

You could always do half and half, Most DRP plans allow you select a percentage you want to participate.

collecting something like 80% in cash and 20% DRP might be a good balance so you have some walking around money, but still feel like you are letting your investment compound a bit in the back ground to.

 

[divs4ever]

You could always do half and half, Most DRP plans allow you select a percentage you want to participate.

collecting something like 80% in cash and 20% DRP might be a good balance so you have some walking around money, but still feel like you are letting your investment compound a bit in the back ground to.

i have partially participated in DRPs in other selected shares ( normally i fully participate in available DRPs )

however my original plan was to reduce DRP participation ( as needed once i retired ), anticipating increased inflation in my later years , instead of drawing down regularly on the portfolio

so i MIGHT participate in the FMG DRP , but reduce participation in MQG or WES ( or both )

given the cloudy near term economic climate , i am still considering the options ( especially if real inflation is around 6% and likely to climb higher

 

[sptrawler]

i have partially participated in DRPs in other selected shares ( normally i fully participate in available DRPs )

however my original plan was to reduce DRP participation ( as needed once i retired ), anticipating increased inflation in my later years , instead of drawing down .

It does become an issue wben retired, especially in these times of low returns, the drawdown requirement increases, whether the dividends increase or not.
So unless you have a cash buffer, it requires the selling of shares to cover the pension withdrawl.
During covid, the pension drawdown requirement has been halved, which has helped a lot.

 

[divs4ever]

I picked up a full drp parcel last divy, got my shares allocated at 18, yeah if I had a crystal ball would of taken the cash and loaded at 14 but easily said now. Still letting it ride for another full drp allocation on the coming divy

yes hindsight can be very educational ( in my case the timeline to participate in the last DRP was just too tight for me )

in SOME DRPs participation is a no brainer , in others it is just convenient for some

 

[divs4ever]

It does become an issue wben retired, especially in these times of low returns, the drawdown requirement increases, whether the dividends increase or not.
So unless you have a cash buffer, it requires the selling of shares to cover the pension withdrawl.
During covid, the pension drawdown requirement has been halved, which has helped a lot.

some holdings have never had a DRP .. like BHP , until recently , or a normally suspended DRP , like APE , some there was SOME cash trickling back , anyway , but will that be enough in say 2024 or 2025 , i don't have a yacht or personal jet to sell , if things get tight

i am hoping to be able to resist drawing down on the portfolio , but who wants to guess at inflation for the next 5 years

 

[spratty84]

Thanks for the replies it is interesting to hear peoples perspectives and different stages of life. At my stage of being 37 (debt free,own my house outright equity in a unit, wifes a clinical nurse on good money and just the one child). I am trying to build a reasonable divy portfolio over the next 10 years as years of manual labour have already buggered my body so will get worse over time. The covid bust was good timing and deployed 80k into the banks at 20 year lows which has been a great start as well a couple species that have been winners (banks i dont drp due to needing to diversify). Main issue is trying to find good companies at an attractive price at the moment. So when i look a great run profitable company like fmg and its future prospects its something i want to accumulate.

 

[basilio]

FMG decision to buy a couple of electric locomotives follows Gina Rineharts similar decision back in September last year. In fact the race to electrify heavy rail haulage across all areas is picking up.

Excellent analysis below on how relatively simple the process will be and the advantages/opportunities for rail freight to go battery electric.

Battery-Electric Freight Trains Could Happen, Eventually

New battery-electric freight trains are beginning to hit the rails, and they could soon be joined by electrified diesel locomotives, too.

cleantechnica.com

Gina Rinehart’s Roy Hill to make history with first battery-powered electric locomotive to operate in Pilbara - Roy Hill

Roy Hill is set to be the first Pilbara miner to use a battery-powered electric locomotive to transport its iron ore to port. The Gina Rinehart-controlled company has bought the newest version of the FLXdrive battery-electric locomotive which has an energy capacity of 7 megawatt hours from...

www.royhill.com.au

 

[Value Collector]

FMG decision to buy a couple of electric locomotives follows Gina Rineharts similar decision back in September last year. In fact the race to electrify heavy rail haulage across all areas is picking up.

Excellent analysis below on how relatively simple the process will be and the advantages/opportunities for rail freight to go battery electric.

Battery-Electric Freight Trains Could Happen, Eventually

New battery-electric freight trains are beginning to hit the rails, and they could soon be joined by electrified diesel locomotives, too.

cleantechnica.com

Gina Rinehart’s Roy Hill to make history with first battery-powered electric locomotive to operate in Pilbara - Roy Hill

Roy Hill is set to be the first Pilbara miner to use a battery-powered electric locomotive to transport its iron ore to port. The Gina Rinehart-controlled company has bought the newest version of the FLXdrive battery-electric locomotive which has an energy capacity of 7 megawatt hours from...

www.royhill.com.au

It’s not to big of a stretch really, the loco’s almost everyone uses (including FMG) are already electric, they are just run by on board diesel generators, so you just have to have batteries to power the electric motor instead of the diesel generator and fuel tanks.

When you think of it, FMGs trains are already 3 kms long pulling hundreds of wagons, so even if they had to hitch a couple of battery wagons to the train for long distance trips it would be doable.

Then when the train slows right down during loading and unloading, they could recharge it from over head wires like a regular electric train, so it wouldn’t have to “plug in”, and you could put a couple of km’s of over head wires over the track at various parts where the rails come close to existing electricity networks to recharge the train on the move.

 

[divs4ever]

Thanks for the replies it is interesting to hear peoples perspectives and different stages of life. At my stage of being 37 (debt free,own my house outright equity in a unit, wifes a clinical nurse on good money and just the one child). I am trying to build a reasonable divy portfolio over the next 10 years as years of manual labour have already buggered my body so will get worse over time. The covid bust was good timing and deployed 80k into the banks at 20 year lows which has been a great start as well a couple species that have been winners (banks i dont drp due to needing to diversify). Main issue is trying to find good companies at an attractive price at the moment. So when i look a great run profitable company like fmg and its future prospects its something i want to accumulate.

i would suggest you SELECTIVELY DRP .. some plans are a good deal and you can always cancel or reduce participation later

in the case of WOW i sold about over 80% of the holding but kept the DRP going ( depending on how you do the math the remaining holding is almost entirely DRP shares accumulated over the last 10 years ) whereas with MQG i would be more likely to withdraw from the DRP ( @ $200 a share the DRP doesn't grow so fast , compared to say AST )

but yes investing for the future , is a tricky balancing act

by the way about your buggered body , think about a FULL medical ( by a quality doctor ) at the worst it will give you a clearer investing time-frame , ( do you need to be more or less aggressive in your investing bias )

remember SOME growth stocks pay divs as well ( and some that pay divs are running out of places to grow )

now i don't know if FMG will spin-off it's 'clean energy arm ' , but keep that in your mind as a possibility , for example BHP has a history of restructuring it's assets ( WES as well )

BTW you can DRP , and buy extra parcels on the way ( that can work well if there are plenty of dips , say a share like QBE )

 

[spratty84]

i would suggest you SELECTIVELY DRP .. some plans are a good deal and you can always cancel or reduce participation later

in the case of WOW i sold about over 80% of the holding but kept the DRP going ( depending on how you do the math the remaining holding is almost entirely DRP shares accumulated over the last 10 years ) whereas with MQG i would be more likely to withdraw from the DRP ( @ $200 a share the DRP doesn't grow so fast , compared to say AST )

but yes investing for the future , is a tricky balancing act

by the way about your buggered body , think about a FULL medical ( by a quality doctor ) at the worst it will give you a clearer investing time-frame , ( do you need to be more or less aggressive in your investing bias )

remember SOME growth stocks pay divs as well ( and some that pay divs are running out of places to grow )

now i don't know if FMG will spin-off it's 'clean energy arm ' , but keep that in your mind as a possibility , for example BHP has a history of restructuring it's assets ( WES as well )

BTW you can DRP , and buy extra parcels on the way ( that can work well if there are plenty of dips , say a share like QBE )

My overall strategy is seeking out growth stocks, solid divy stocks and the odd speckie that tickles my fancy but all at a reasonable value. Im naturally very frugal and dont like over paying for anything. As for my body i have a family history with arthritis and due to wear and tear from work and bloody footy my knees, shoulders and neck are not in the best, but to be honest most tradies are not in much better shape by late 30s to 40s. I have seen my farther an ex farmer who is totally crippled by pain at 60 by working longer than he should have. So i made a lifestyle decision a couple years ago and got a job on a local council to preserve my body as well have a better work life balance.

 

[divs4ever]

i am not condemning your decision , or your early planning , just hoping we can get you in a ( financially ) comfortable position early , because life is full of surprises .. but watch the strong pain-killers i was on them and they ate a hole in my stomach ( something the GP hasn't even thought about asking about yet , despite the various scans showing right shoulder damage , seems nothing medically important happened before July 2016 to me )

using our big 4 banks , the two major food retailers and our two largest mining companies as a guide ( i could add the two major utility companies as well ) finding a good SOLID company is hard , especially if they start 'refreshing the board ' for various reasons , you might need to keep a little bit flexible

 

[sptrawler]

My overall strategy is seeking out growth stocks, solid divy stocks and the odd speckie that tickles my fancy but all at a reasonable value. Im naturally very frugal and dont like over paying for anything. As for my body i have a family history with arthritis and due to wear and tear from work and bloody footy my knees, shoulders and neck are not in the best, but to be honest most tradies are not in much better shape by late 30s to 40s. I have seen my farther an ex farmer who is totally crippled by pain at 60 by working longer than he should have. So i made a lifestyle decision a couple years ago and got a job on a local council to preserve my body as well have a better work life balance.

I was in exactly the same situation, did exactly what you are doing, it worked out fine.
Replaced knees and hip in my 50's retired at 56 self funded, always worked for wages it can be done if you play the long game and stick to the plan.
I always found having a line of credit ready for those once in a lifetime occassions, that happen every 7 to 10 years was handy. No point if opportunity presents and having no money available.

 

[spratty84]

I was in exactly the same situation, did exactly what you are doing, it worked out fine.
Replaced knees and hip in my 50's retired at 56 self funded, always worked for wages it can be done if you play the long game and stick to the plan.
I always found having a line of credit ready for those once in a lifetime occassions, that happen every 7 to 10 years was handy. No point if opportunity presents and having no money available.

Great to hear mate, i have kept a redraw open on my home for that exact reason i dont want to be short when a rare opportunity arises.

 

[sptrawler]

Great to hear mate, i have kept a redraw open on my home for that exact reason i dont want to be short when a rare opportunity arises.

Absolutely spot on, the dividend is what replaces your wages, when the species do well, use the profit to buy more dividends.

 

[Value Collector]

Absolutely spot on, the dividend is what replaces your wages, when the species do well, use the profit to buy more dividends.

Also, nothing wrong with taking out capital too once you are in the fourth quarter of the game, you don’t want to die leaving to much money on the table, especially when the age pension is there as a back up for those final slow years.