FMG - Fortescue Ltd

[sptrawler]

Best way to reduce demand for raw materials, have a lockdown.

 

[eskys]

Markets suffering from diarrhoea, our 200 has broken below 7000.... tonight's future's red

 

[JohnDe]

Markets have been dropping for weeks now, we'll get some reprieve tonight? VIX up

I am watching closely, trying to assess when and if there will be a good entry point soon

 

[Value Collector]

Best way to reduce demand for raw materials, have a lockdown.

Best way to recover economy from lock downs, infrastructure spending

Not to mention all the pent up demand caused by multiple supply chain interruptions globally.

I might be going out on a limb here, but I think once these short term situations begin to clear, we are going to see the global economy thriving for a while just based on pent up demand.

 

[divs4ever]

UMMM did anyone notice an Ebola outbreak in the US ?? yes it looks little small beans BUT it just so happens someone is trialing an Ebola vaccine

DYOR

i think i need $17.50 before adding more FMG

 

[eskys]

Look at our graph, 200 above 7000, and FMG has come a long way since it's low today (not an indication to buy, just a mention by observation what's happening now. Pre dow green at the moment, VIX too)

 

[Garpal Gumnut]

Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.

He will resume his position as CEO of Iron Ore which is overdue.

I'm glad I got out of FMG when I did.

From the AFR.

Barcelona | Andrew Forrest will directly run his Fortescue Metals Group’s iron ore business for the first time since 2005, as part of a wide-ranging C-suite shake-up that has also installed a new boss at his ever-expanding green-energy business Fortescue Future Industries.

Talismanic FFI boss Julie Shuttleworth will step aside into a yet-to-be-defined “very senior executive leadership role”, making way for former GE executive Mark Hutchinson to become FFI’s new CEO with a more explicitly global remit.

Mr Forrest will become “executive chairman”, a more hands-on role in which both Fortescue CEOs – FFI’s Mr Hutchinson and FMG’s departing boss Elizabeth Gaines –- will report to him and the board.

gg

 

[JohnDe]

Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.

He will resume his position as CEO of Iron Ore which is overdue.

I'm glad I got out of FMG when I did.

From the AFR.



gg

The move gives Dr Forrest total control of Fortescue, both as its biggest shareholder with more than 30 per cent of its stock, and as its most senior executive. Both Dr Hutchinson and a yet-to-be appointed iron ore chief executive will eventually report directly to Dr Forrest.

Fortescue has been looking for a replacement for Ms Gaines since she announced her intention to resign in December 2021, with Ms Gaines telling reporters at the company’s March quarter production report the Fortescue board was then considering a short list of candidates.

Dr Forrest said in a statement the sweeping changes at the company he founded were aimed at locking in both Fortescue‘s decarbonisation plans for its iron ore business and cementing its move towards becoming a global green energy giant.

“Today is a further progression of Fortescue’s transition to a global, green renewable and resources company,” he said.

“This growth and value to shareholders is already evident with our shareholder base doubling since FFI was launched, with our investors ranging from top tier institutional banks to grassroots investors, all wanting to be a part of this mission, as we continue to strongly outperform our peers in the iron ore sector.”

https://www.theaustralian.com.au/business/mining-energy/andrew-forrest-takes-back-top-job-at-fortescue-metals-group/news-story/ea04fe6aecef497feb79df884f52ee73

 

[JohnDe]

Energy security fears spark oil and gas supply pledge​

Chevron also took a swipe at iron ore producer Fortescue Metals after its chairman Andrew Forrest attacked the oil and gas industry for relying on carbon capture schemes to cut emissions.

Dr Forrest slammed carbon capture as unreliable and questioned whether a mass rollout of the technology was going to solve the industry’s pollution problems.

Chevron said its $2.5bn Gorgon carbon capture and storage project under WA’s Barrow Island, which is still only operating at half capacity, was storing the equivalent of Fortescue’s annual pollution each year.

“We’ve injected 6 million tonnes of carbon dioxide since 2019 and 2.1 million tonnes last year, and that’s about equivalent to the emissions a company like FMG emits in a year,” Mr Judd told the conference.

“I read all of the negativity around it but I see it happening reliably every day.”

https://www.theaustralian.com.au/business/mining-energy/energy-security-fears-spark-oil-and-gas-supply-pledge/news-story/8bb9f61f0ba431724748631e87086c67

 

[divs4ever]

Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.

He will resume his position as CEO of Iron Ore which is overdue.

I'm glad I got out of FMG when I did.

From the AFR.



gg

am still content i bought in and stayed , but VERY HAPPY i didn't 'back up the truck ' and buy a very large position

if the price tumbles i will CONSIDER buying more cheaper

but yes making profits from this 'green energy ' IS harder than it looks

 

[Value Collector]

Well it sounds as if Twiggy finally realises like many others that Hydrogen is not as easy to sell as a near term prospect as he thought.

gg

What makes you think that? To me the leadership changes have been entirely about putting more focus on FFI.

 

[sptrawler]

What makes you think that? To me the leadership changes have been entirely about putting more focus on FFI.

I agree with you, it is a huge undertaking and Twiggy has made it a high profile undertaking, which invites a huge amount of speculative money and it will have a lot of moving parts.
Twiggy has the most skin in the game, both financially and personally, he has to take control, you can delegate responsibility but if it goes pear shaped you can't delegate accountability.
I think him taking over and having everyone report to him, makes absolutely perfect sense a bit like Kerry Packer he didn't delegate responsibility, what has happened since he left?

 

[Garpal Gumnut]

am still content i bought in and stayed , but VERY HAPPY i didn't 'back up the truck ' and buy a very large position

if the price tumbles i will CONSIDER buying more cheaper

but yes making profits from this 'green energy ' IS harder than it looks

What makes you think that? To me the leadership changes have been entirely about putting more focus on FFI.

I'm a great admirer of Twiggy, but he is a player, and he plays hard.

If he is becoming hands on with FMG Iron as CEO and giving the flip to the FFI leadership it means only two things.

1. FMG Iron is not being run to extract maximum bang for bucks.

2. FFI which is really a large room full of people with big ideas and no life experience needs to be pulled back in to the real world of expected earnings, timelines and results.

FFI depends on FMG for funding. FMG results and bottom line will be diluted by keeping the Silicon Valley of Digging going.

Also, and it has to be said, Hydrogen as a fuel has yet to be proven to be a cost effective way to replace fossils. Many of the members of the Engineer Table here at the pub are impossible to engage on the future of Hydrogen. I can hardly get a word out of them for their laughing. And as you know engineers rarely laugh. They say it is not possible to have green Hydrogen efficiently and even as a non green byproduct it is "difficult".

So the old Twiggy is back on deck.

FMG went up 2.1% today, although RIO is up 2.6% and BHP 3.4% , so the market agrees with me.

I reckon it will be a pump and dump once the oxygen meets hydrogen and the mist of Twiggy's return evaporates.

I'll be with @divs4ever and wait for a lower price.

gg

 

[Value Collector]

I agree with you, it is a huge undertaking and Twiggy has made it a high profile undertaking, which invites a huge amount of speculative money and it will have a lot of moving parts.
Twiggy has the most skin in the game, both financially and personally, he has to take control, you can delegate responsibility but if it goes pear shaped you can't delegate accountability.
I think him taking over and having everyone report to him, makes absolutely perfect sense a bit like Kerry Packer he didn't delegate responsibility, what has happened since he left?

It says his new role is executive chairman, I would say that is pretty much always been his role.

Also, he is taking the reins of the Iron Ore business in the mean time between Elizabeth moving to a new role and when they can find some one new.

It sounds like they are just freeing up management to focus on the growth projects in FFI, while Twiggy baby sits the Daily runnings of the Iron Ore business, which is a much easier job.

But of course twiggy will be involved on both sides.

 

[Value Collector]

I'm a great admirer of Twiggy, but he is a player, and he plays hard.

If he is becoming hands on with FMG Iron as CEO and giving the flip to the FFI leadership it means only two things.

1. FMG Iron is not being run to extract maximum bang for bucks.

2. FFI which is really a large room full of people with big ideas and no life experience needs to be pulled back in to the real world of expected earnings, timelines and results.

FFI depends on FMG for funding. FMG results and bottom line will be diluted by keeping the Silicon Valley of Digging going.

Also, and it has to be said, Hydrogen as a fuel has yet to be proven to be a cost effective way to replace fossils. Many of the members of the Engineer Table here at the pub are impossible to engage on the future of Hydrogen. I can hardly get a word out of them for their laughing. And as you know engineers rarely laugh. They say it is not possible to have green Hydrogen efficiently and even as a non green byproduct it is "difficult".

So the old Twiggy is back on deck.

FMG went up 2.1% today, although RIO is up 2.6% and BHP 3.4% , so the market agrees with me.

I reckon it will be a pump and dump once the oxygen meets hydrogen and the mist of Twiggy's return evaporates.

I'll be with @divs4ever and wait for a lower price.

gg

I'm a great admirer of Twiggy, but he is a player, and he plays hard.

If he is becoming hands on with FMG Iron as CEO and giving the flip to the FFI leadership it means only two things.

1. FMG Iron is not being run to extract maximum bang for bucks.

2. FFI which is really a large room full of people with big ideas and no life experience needs to be pulled back in to the real world of expected earnings, timelines and results.

FFI depends on FMG for funding. FMG results and bottom line will be diluted by keeping the Silicon Valley of Digging going.

Also, and it has to be said, Hydrogen as a fuel has yet to be proven to be a cost effective way to replace fossils. Many of the members of the Engineer Table here at the pub are impossible to engage on the future of Hydrogen. I can hardly get a word out of them for their laughing. And as you know engineers rarely laugh. They say it is not possible to have green Hydrogen efficiently and even as a non green byproduct it is "difficult".

So the old Twiggy is back on deck.

FMG went up 2.1% today, although RIO is up 2.6% and BHP 3.4% , so the market agrees with me.

I reckon it will be a pump and dump once the oxygen meets hydrogen and the mist of Twiggy's return evaporates.

I'll be with @divs4ever and wait for a lower price.

gg

People were saying the same things about twiggy’s idea of mining the sheet Iron ore deposits that built FMG too.

But when you break down the FFI project, they are basically large renewable energy businesses producing electricity, that they plan to convert to Hydrogen based fuels which there are many forms off.

But let’s say the hydrogen plans don’t turn out to be as profitable, FMG is still left with large renewable electricity projects that can be plugged into the national grid and be used to offset coal, and these alone will be profitable.

So it’s not a big win or lose bet, it’s a group of investments in stages that many end in having a large profitable hydrogen business, but if they get half way, they will still have a decent renewable energy business, and big fuel savings at their mines.

 

[Garpal Gumnut]

It says his new role is executive chairman, I would say that is pretty much always been his role.

Also, he is taking the reins of the Iron Ore business in the mean time between Elizabeth moving to a new role and when they can find some one new.

It sounds like they are just freeing up management to focus on the growth projects in FFI, while Twiggy baby sits the Daily runnings of the Iron Ore business, which is a much easier job.

But of course twiggy will be involved on both sides.

People were saying the same things about twiggy’s idea of mining the sheet Iron ore deposits that built FMG too.

But when you break down the FFI project, they are basically large renewable energy businesses producing electricity, that they plan to convert to Hydrogen based fuels which there are many forms off.

But let’s say the hydrogen plans don’t turn out to be as profitable, FMG is still left with large renewable electricity projects that can be plugged into the national grid and be used to offset coal, and these alone will be profitable.

So it’s not a big win or lose bet, it’s a group of investments in stages that many end in having a large profitable hydrogen business, but if they get half way, they will still have a decent renewable energy business, and big fuel savings at their mines.

I basically agree with both of you, however it is the timing and speed of Twiggy's move on his Fe and H2 interests that intrigues me.

My guess is that there are quite a number of known unknowns happening in FMG atm.

And Twiggy doesn't run his show like a long running musical where people are waiting to take up different parts.

At FMG you either perform or you are out. Nobody sits in the wings on full pay.

gg

 

[divs4ever]

FMG was No. 9 ( by $value ) in my portfolio at the beginning of the month , so i have a few FMG

BHP was No. 4 at the same time

assuming BHP will slide a little after the demerger , i would be happy to bring FMG up to equal ( to the incredible shrinking ) BHP at the right price

one company has a recent record of getting projects over the line , and the other of reversing decisions

as far as i can work it out Hydrogen ( isolation ) requires power , and power is getting more expensive ( even solar ) , i have been watching the energy companies in NZ ( who have various sources of renewable energy ) and SO FAR , geothermal seems to be the most reliable for industrial applications ( and should be more resistant the cost increases )

however Australia doesn't have much in current geothermal resources ( but they might be developed artificially in the future )

 

[divs4ever]

People were saying the same things about twiggy’s idea of mining the sheet Iron ore deposits that built FMG too.

But when you break down the FFI project, they are basically large renewable energy businesses producing electricity, that they plan to convert to Hydrogen based fuels which there are many forms off.

But let’s say the hydrogen plans don’t turn out to be as profitable, FMG is still left with large renewable electricity projects that can be plugged into the national grid and be used to offset coal, and these alone will be profitable.

So it’s not a big win or lose bet, it’s a group of investments in stages that many end in having a large profitable hydrogen business, but if they get half way, they will still have a decent renewable energy business, and big fuel savings at their mines.

from memory NST has a big coal deposit( about Maules Creek size at at early assays ) ( not especially high quality , to be sure ) right next to FMG tenements ,

now NST is not particularly attracted to coal mining , but would probably do a royalty deal with FMG if Twiggy wanted the coal

but near term Twiggy's main problem will be , what if , someone triggers a hot war with China

 

[basilio]

I was impressed with Twiggys decision to directly oversee the iron ore side of FMG as well as going full bore on Green Hydrogen production. But it won't happen overnight. Indeed the iron ore business took many years to come to fruition

IMV it highlights his pragmatism about the current operations and his vision for the future.
As far as making serious money from renewable energy and hydrogen I believe VC's analysis is on the money. At the very minimum FMG will drastically reduce energy costs in their operation which will go to the iron ore bottomline.

At the next level they will create valuable renewable energy projects that would generate income from the local energy grid.

But finally if/when all the parts come together, the massive investment in renewable energy and hydrogen electrolyers will result in a huge hydrogen market both here and overseas that will revolutionise the steel industry and play an important role in slowing down global warming and fossil fuel pollution. And of course offer an excellent return to shareholders.

 

[Country Lad]

I see it as very logical with Twiggy changing from non executive chairman to executive chairman and it would not necessarily mean that the iron ore part of the business is underperforming.
Until now, with Twiggy being non-executive, the CEO level reports to the board (and not directly to the chairman on a day to day basis) which is normal when you have experienced and proven people at CEO level.

With all the changes and the new people who would normally report to the board, (and also first reports) coming in, there needs to be more of a day to day interaction and thus they will report directly to Twiggy. This arrangement is not unusual, I have been involved in such on a number of occasions. It doesn't mean Twiggy is running the show, just making sure everybody settles in to their new role and ensuring correct day to day decisions are being made. I would expect Twiggy going back to non executive when the new guys are performing in their roles.