Perhaps some of his team are thinking that the green "revolution" may actually be just going round in circles.Andrew Forrest’s executive rout is continuing, with newly appointed chief financial officer Christine Morris quitting on Thursday.
She was only appointed to the role in early June, and started in July, after a six-month search for a replacement for long-term finance boss Ian Wells.
Ms Morris’s surprise departure comes only days after the equally sudden resignation of Fiona Hick, chief executive of Fortescue’s mining arm.
Ms Morris was appointed under Ms Hick’s leadership, and her exit is likely to have been linked to the earlier departure, sources say.
The move extends two years of acute turmoil in Fortescue’s senior leadership ranks, extending the turnover in senior executive team members to almost a dozen.
And so it continues.
Another FMG exec has departed.
From Evil Murdoch Press
Perhaps some of his team are thinking that the green "revolution" may actually be just going round in circles.
Mick
Such short term thinking...I might apply for a job with FMG, seems like they have a few openings.
Mick
The China crises is greatly exaggerated by the media.With China now cutting back on Alternative Clean Energy (Hydrogen) and its housing and property market in the doldrums for the next three years (Iron Ore), what could possibly go wrong for FMG?
gg
If I can say astrologically stars are not so kind on FMG- personal family issues, executives quitting, anti-press from West Australian a company owned by Seven which also owns largely of Westrac, government focus, cost overrun on projects, are nonaligned stars.There has been a military coup in Gabon. Certainly a cause for concern for FMG with their big new mine project. Too early to know what teh outcome will be.
A few other points regarding the Full Year financials.
1) With the formal amalgamation of FFI with FMG to form just Fortescue the financing of renewable energy projects now falls inside the whole company structure. Previously FMG had allocated 10% of its net profits to FFI . Now capital allocations will be determined as a whole of company decision.
2) Dividend payouts were 65% of profits. This fall from last years 78% holds more funds internally for capital works, financial conservatism.
3) There was a $1billion impairment change made against the Iron Bridge project. It certainly cost more than they bargained for. Hopefully it at least works well.
Fortescue profit drops on Iron Bridge impairment charge; co-CEO to step down
Australia's Fortescue on Monday reported a $1 billion pre-tax impairment charge associated with its flagship magnetite growth project, while posting its lowest annual profit in three years amid a surprise senior-management overhaul.www.reuters.com
MickThe mainstream media drew a discreet veil over the Fortescue Metals chairman’s wild speech to the Boao Forum in Perth last week. Yet if it is a glimpse of the conversation with staff behind closed doors, the only surprising thing about the departure of two senior executives and a board member last week was that it didn’t happen earlier. Forrest is sounding like the people who glue themselves to train tracks instead of the chair of Australia’s third-largest mining corporation.
“Business is causing global warming,” he told the forum. “Business will kill your children. Business is responsible for lethal humidity.” Fortescue exported a record 192 million tonnes of iron ore last year. Forrest told the forum his ambition was to lead the world in ensuring metals and energy are delivered “in a form that won’t kill your children”. It is an indication of how cosily woke the world of corporate investment has become that few have been prepared to call out the recklessness of betting the company’s future on green hydrogen, which has yet to be manufactured at scale anywhere in the world and for which there is not yet a genuine market.
Forrest described hydrogen as the “miracle molecule … the Swiss Army knife of energy and green products” in a speech to the National Press Club two years ago. “To make green hydrogen, you simply split water. Any old water. It can be wastewater, desalinated water, seawater.” Yet hydrogen is not an energy source, it is an energy carrier. It requires a grid-shattering amount of power to produce, roughly 50 TWh (terawatt-hours) per megatonne at an efficiency rate of 67pc.
The heavy consumption of power alone condemns Fortescue’s goal of manufacturing 15Mt by 2030 to the realm of fantasy. It is so far off the dial it makes the government’s target of 82 per cent green electricity by 2030 look puny. In the highly unlikely event Australia is producing 180 TWh of electricity from renewables by 2030, Forrest could gobble the lot and still fall 570 TWh short of what he needs. Fortescue Future Industries NSW manager Joshua Moran set out the scale of the challenge at a conference in May last year. Fortescue will need to deliver 20GW of electrolysers a year by 2029, almost 20 times more than the current global output. It must install 20 wind turbine blades daily, each 80m long, and install 31 million solar modules a year.
It is a measure of the strength of the prevailing vision among the corporate elite and journalists that so few have criticised Forrest’s monomaniacal obsession with green hydrogen. The uncritical woke press has succumbed to groupthink, hailing as a good thing the $2bn government subsidy of the research and development of green hydrogen announced in this year’s budget. Forrest, whose company stands to pocket a substantial chunk of that subsidy, somewhat ungratefully described it as “kicking the can down the road”, suggesting he’d be putting his hand out for more.
He can expect a sympathetic reception since Chris Bowen’s ambition of turning Australia into a green energy export hub rests on the delusion that Australia’s supply of renewables is inexhaustible.
It is not. The supply of wind, solar and hydropower is constrained by the scarcity of land, as Fortescue’s subsidiary, Squadron Energy, is realising as its wind farm proposals struggle against growing community opposition.
The idea Squadron’s renewable energy assets would form part of a vertically integrated business plan with Fortescue’s green hydrogen makes sense for about two seconds. But when the impossibly vast tracts of land required to generate the electricity needed are factored in, it looks barmy.
Squadron claims it will build 30 per cent of the renewable energy required to meet Bowen’s 2030 target or approximately 9GW of nameplate capacity. It has just 2.1GW in operation. The 5.5GW proposed or under construction is hitting roadblocks that put the timetable in doubt.
The most severe setback is in the Upper Burdekin, which was to be financed by a Power Purchase Agreement with Apple. After adverse publicity about the destruction of 749ha of koala habitat and threats to other vulnerable species, the tech giant decided to pull out.
The construction of Squadron’s Clarke Creek wind farm came to an abrupt halt in May for reasons that still need to be fully explained. The lead times for construction mean the company’s renewables target is as fanciful as its plans for green hydrogen. Yet this is Forrest’s vision, which senior executives are required not to question.
Irving L Janis, in his classic 1975 study of groupthink, identifies a lack of vigilance and excessive risk-taking as forms of temporary group derangement to which responsible executives are not immune. The chief executive manipulates his advisers to rubberstamp his own ill-conceived proposals and places subtle constraints to prevent a member from fully exercising his critical powers.
Good businesses do not rely on the vision of one person but use the combined resources of a team each operating within their field of professional competence. A chairman’s role is to temper the excessive zeal of executives. At Fortescue, it’s the other way around.
The theme of the talk was "lethal humidity". The inevitable consequence of rising temperatures. Lethal for animals as well as humans.Dr Andrew Forrest at Boao Forum for Asia Perth 2023
Watch our Executive Chairman and Founder, Dr Andrew Forrest AO, speak the Boao Forum for Asia Perth 2023. Dr Forrest explains the practical steps needed to accelerate collaboration, stop global warming and build a green energy economy in the Asia-Pacific.fortescue.com
Yes I love Twiggies passion and enthusiasm and I bought FMG on the belief of his vision, but as Nick Carter says it is bottom of the garden stuff, the thing is though it has to start somewhere.Nick Cater writing in the Evil Murdoch Press has a less than sanguin view of Twiggy and his dreams.
Mick
Worse than absent market or even feasability technically:Yes I love Twiggies passion and enthusiasm and I bought FMG on the belief of his vision, but as Nick Carter says it is bottom of the garden stuff, the thing is though it has to start somewhere.
The major problem Twiggy has IMO, is the fact there really isn't a huge market yet for what he wants to make (H2), so a lot of development costs are really just going to be losses IMO.
It is a bit like the Tesla situation, they sold their first EV in 2008, but it really hasn't been until now that they have taken off, because there wasn't the demand and or the acceptance that the technology was going to become mainstream or practical, but now EV sales are on an exponential rise.
Twiggy has the same problem, hydrogen is a boutique product with a limited market and incredibly expensive and energy intensive to make.
So he really does need industry and Governments to back the move and drive the demand, unless that happens, it will be long term losses.
So it will show if the Governments are serious about global warming and addressing it, or are just using global warming as a vote catcher, there are still an awful lot of politicians buying waterfront properties.
From Twiggies perspective, it's a bitch being the pioneer, because everyone plays safe and sit back to watch if you fly or burn, before they want to get involved.
He's between a rock and a hard place, but if he pulls it off, it will be big bucks.
You want to see a pioneer, I see a..at least publicly crazy fanatic.Yes I love Twiggies passion and enthusiasm and I bought FMG on the belief of his vision, but as Nick Carter says it is bottom of the garden stuff, the thing is though it has to start somewhere.
The major problem Twiggy has IMO, is the fact there really isn't a huge market yet for what he wants to make (H2), so a lot of development costs are really just going to be losses IMO.
It is a bit like the Tesla situation, they sold their first EV in 2008, but it really hasn't been until now that they have taken off, because there wasn't the demand and or the acceptance that the technology was going to become mainstream or practical, but now EV sales are on an exponential rise.
Twiggy has the same problem, hydrogen is a boutique product with a limited market and incredibly expensive and energy intensive to make.
So he really does need industry and Governments to back the move and drive the demand, unless that happens, it will be long term losses.
So it will show if the Governments are serious about global warming and addressing it, or are just using global warming as a vote catcher, there are still an awful lot of politicians buying waterfront properties.
From Twiggies perspective, it's a bitch being the pioneer, because everyone plays safe and sit back to watch if you fly or burn, before they want to get involved.
He's between a rock and a hard place, but if he pulls it off, it will be big bucks.
There is a lot of money being thrown around on the dream, there is a lot of reputations on the line, there is another term in the wilderness in the offering if this reduction in electricity bills doesn't look like happening.But hey, not the first one and he milks it.
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