FMG - Fortescue Ltd

Don't be upset, Value Collector. To understand what the discussion was all about, we need an expandable mind and some lateral thinking which is not always easy. That's why we have so much conflict about different subjects......we just cannot see where others are coming from sometimes......my two bobs worth and putting my foot in it....have a great weekend

I'm surprised and a bit dismayed that some posters see FMG as a solely iron ore company. That is simply not the case.

It's current and continuing operation is digging and selling iron ore. Two years ago however FMG announced they were developing a wide ranging clean/renewable energy operation to
1) Totally remove fossil fuel usage from their operation
2) Create the capacity for other heavy industry operations to go carbon neutral.
3) Completely change the business paradigm renewable energy operations

To that end they established a whole owned subsidiary FFI and have funded it with 10% of FMG.s profits to achieve these goals.
Since then they have pursued scores of joint ventures, takeovers and internal operations to that end.

The conversations about hydrogen networks, ammonia plants and so on are on topic. If you check out FMG's official information page these are the major news items posted.

That doesn't mean of course that the mining, exploration and sale of iron ore isn't critical. But the new additional direction is intended to be as financially important as iron ore production within this decade.

basilio said:

I'm surprised and a bit dismayed that some posters see FMG as a solely iron ore company. That is simply not the case.

It's current and continuing operation is digging and selling iron ore. Two years ago however FMG announced they were developing a wide ranging clean/renewable energy operation to
1) Totally remove fossil fuel usage from their operation
2) Create the capacity for other heavy industry operations to go carbon neutral.
3) Completely change the business paradigm renewable energy operations

To that end they established a whole owned subsidiary FFI and have funded it with 10% of FMG.s profits to achieve these goals.
Since then they have pursued scores of joint ventures, takeovers and internal operations to that end.

The conversations about hydrogen networks, ammonia plants and so on are on topic. If you check out FMG's official information page these are the major news items posted.

That doesn't mean of course that the mining, exploration and sale of iron ore isn't critical. But the new additional direction is intended to be as financially important as iron ore production within this decade.

News

www.fmgl.com.au

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i would have preferred FMG to stay an iron ore miner , but management ( and a major share-holder ) has decided to diversify/expand

my task as a minor share-holder is decide whether to stay ( or even add extra ) or reduce when in profit ( or even exit )

i have been in other companies where management has lost focus whilst pursuing new projects ( HVN and WOW as examples )

i ALSO note the climate agenda folks are also targeting nitrogen emissions , does that mean FMG has to cull the cattle in uses to re-mediate the leases ( in the near future )

This is an FMG thread.
Whatever FMG do as a business should reside here.
Macroeconomic affects to a varying degree I believe are also relevant to this thread.
FFI info should be here. No discussion, it affects us as shareholders and is part of FMG.
Let’s stop this ‘it’s my ball and I don’t like it so I am taking it away’ attitude. ‘Oh I’m going to ignore this thread’
Let’s stop this schoolground attitude. We’re adults and should behave as such.
I’ve said it before, and I fear it will be said again play nicely guys. We all here to throw our 2 cents worth in that is relevant to the thread.
Gunnerguy
??

Interesting read in the Fin, if you can access it. Summary is that we should be prioritising electrification and hydrogen isn't going to be viable for some time.

actually i saw a snippet from another company ( BPT ) about blending H2 in a natural gas product , now my reaction was some very elevated eyebrows

i guess time will tell , but my investments into other 'clean' technologies have either failed absolutely or turned to crap ( like CCE as an example )

i hold FMG buy remain sceptical on this adventure

If you've got a spare hour, the vid I posted here explains the good, bad and ugly of hydrogen in great depth.

I've come to the view that electricfying the fleet of trucks etc still makes sense economically but use batteries not hydrogen.

Although I do wonder if long term FMG could get into making green steel at the source and selling that for a premium instead of ore?

Mr Flibble said:

If you've got a spare hour, the vid I posted here explains the good, bad and ugly of hydrogen in great depth.

I've come to the view that electricfying the fleet of trucks etc still makes sense economically but use batteries not hydrogen.

Although I do wonder if long term FMG could get into making green steel at the source and selling that for a premium instead of ore?

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given WA's location that would make more sense to me than some other stuff i am seeing , especially if FMG used other nearby minerals to make various specialty steels ( like Indonesia is doing )

Sean K said:

Interesting read in the Fin, if you can access it. Summary is that we should be prioritising electrification and hydrogen isn't going to be viable for some time.

View attachment 147943

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I am reading that Saul Guys book now, and his Ideas fit with Andrew’s, I don’t think he has actually taken a good look at exactly what Forrest has planned.

Andrew Forrest actually agrees that electrification is the main energy solution, and the hydrogen is only going to be used for the parts that are very difficult to electrify.

For example it’s easy to electrify a car and a truck, but difficult to electrify a ship (unless it’s nuclear powered).

The great thing with Fortescue’s plan to generate green hydrogen is that it will be utilising renewable electricity, So the first step is to build out a bunch of wind and solar infrastructure.

This wind and solar infrastructure can be used to provide electricity for everything that can be electrified and charge batteries, and then during peak production times the excess can be used to make hydrogen for those hard to electricfy areas.

The technology that was developed by the University of Adelaide to split hydrogen just using a photocatalyst and solar radiation attracted the attention of FMG. In February 2022 FFI and Sparc announced a joint development program to fast track the research and potential commercial production of this radical approach o hydrogen generation.

It seems the initial research has been very promising and they are now fast tracking development of a pilot plant to test and improve the various elements of the process. With Twiggy cracking the whip this project will not die wondering.

Sparc Hydrogen Completes Preliminary Techno-Economic Analysis and Accelerates Pilot Plant

HIGHLIGHTS
• Preliminary Techno-Economic Analysis completed for Sparc Hydrogen’s photocatalytic water splitting technology

• Study confirms the commercial potential for the Sparc Green Hydrogen process

• Based on the positive outcomes of the study, the Sparc Hydrogen joint venture partners have agreed to accelerate the project schedule and immediately commence scoping work on a pilot plant

Sparc Technologies Limited (ASX: SPN) (Sparc, Sparc Technologies or the Company) is pleased to report on the completion of a preliminary Techno-Economic Analysis (TEA) by Sparc Hydrogen Pty Ltd (Sparc Hydrogen).

Sparc Hydrogen, a joint venture between Sparc Technologies, Fortescue Future Industries (FFI) and the University of Adelaide, is seeking to commercialise patent-pending photocatalytic water splitting technology with the aim of producing low-cost green hydrogen on a commercial scale (the Sparc Green Hydrogen process). The preliminary TEA has been delivered through a collaborative effort from the joint venture partners, led by the University of Adelaide, and supported by independent engineering consultant, ITP Thermal (ITP). The completion of this collaborative effort is a significant milestone for Sparc Hydrogen and on the back of the positive outcomes, the joint venture partners have agreed to accelerate scoping activities for a pilot plant ahead of the original project schedule.

Commenting on the milestone, Sparc Technologies Executive Chairman, Stephen Hunt, said:
“Today marks a significant milestone for Sparc Technologies and the Sparc Hydrogen JV, with the preliminary TEA confirming the low-cost potential of this green hydrogen technology. The decision to accelerate a pilot plant is evidence of the JV partner’s enthusiasm and is an important step on the path to commercialisation.”

Fortescue Future Industries CEO, Mark Hutchinson, added:
“Fortescue is building a world-wide tech network to encourage scientists and engineers from across the globe to advance research and development in technologies. Our goal is to develop green hydrogen and renewable energy innovations and technology, with a specific focus on decarbonising hard-to-abate industries that can be commercialised fast. The result of the preliminary TEA is welcome news.”

For those interested FMG pulls together all its developments of renewable energy projects and how they interact with their current operations on one page.

FMG SP falling (like other resource stocks). General stock market concern, couples with fears of a recession and falling iron ore prices.

Worth noting however that as the Oz dollar falls against the US dollar the final value of iron ore sales rises . The dollar is currently 62c. FMG based their financial predictions on a 73 c dollar. Big difference in final figures.

If (if...) sales stay steady and iron ore price stays over $90US a ton it is the equivalent of around $105-110US a tonne last October (73-75c)

basilio said:

FMG SP falling (like other resource stocks). General stock market concern, couples with fears of a recession and falling iron ore prices.

Worth noting however that as the Oz dollar falls against the US dollar the final value of iron ore sales rises . The dollar is currently 62c. FMG based their financial predictions on a 73 c dollar. Big difference in final figures.

If (if...) sales stay steady and iron ore price stays over $90US a ton it is the equivalent of around $105-110US a tonne last October (73-75c)

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the devil in all these calculations , is how much plant ( and parts ) do they need to buy in $US , Korea and Japan make some usable stuff and maybe can be bought in local currency ( theirs or ours )

22/23 Quarterly production figures out. Record sales for first quarter production. Drop in iron ore prices . Strong focus on FFI progress as well as upcoming commissioning of Iron Bridge project in March 23.

Making $70 US a ton after costs. So $3B US for the first quarter.

Record first quarter operating performance in strong start to FY23

Quarterly summary
• Total Recordable Injury Frequency Rate (TRIFR) improved to 1.7 at 30 September 2022, 15 per cent lower than 2.0 at 30 September 2021

• Updated industry leading decarbonisation roadmap, with US$6.2 billion capital investment planned by 2030 to eliminate fossil fuel risks, saving an estimated US$3 billion by 2030 and rising to annual savings of US$818 million once fully implemented

• Iron ore shipments of 47.5 million tonnes (mt) in Q1 FY23 were four per cent higher than the prior comparable period and a record for a first quarter

• Average revenue of US$87/dry metric tonne (dmt) for the quarter, realising 85 per cent of the average Platts 62% CFR Index

• C1 cost of US$17.69/wet metric tonne (wmt), three per cent higher than the previous quarter with a focus on mitigating industry wide cost pressures, including fuel costs

• Cash of US$3.3 billion (net debt of US$2.8 billion) at 30 September 2022 after payment of the FY22 final dividend of US$2.4 billion and capital expenditure of US$653 million in the quarter

• Fortescue Future Industries (FFI) entered a collaboration with Tree Energy Solutions which aims to accelerate development of a green hydrogen and green energy import facility in Germany

• FFI and Incitec Pivot Limited (IPL) progressed planning for the conversion of IPL’s Gibson Island ammonia facility to run on green hydrogen, commencing Front End Engineering Design

• FFI established a U.S. Technology Hub and announced partnership with the U.S. Department of Energy’s National Renewable Energy Laboratory
• Guidance for FY23 shipments, C1 cost and capital expenditure remains unchanged
.
September 2022 Quarterly Production Report (PDF 329.6 KB)

basilio said:

22/23 Quarterly production figures out. Record sales for first quarter production. Drop in iron ore prices . Strong focus on FFI progress as well as upcoming commissioning of Iron Bridge project in March 23.

Making $70 US a ton after costs. So $3B US for the first quarter.

Record first quarter operating performance in strong start to FY23

Quarterly summary
• Total Recordable Injury Frequency Rate (TRIFR) improved to 1.7 at 30 September 2022, 15 per cent lower than 2.0 at 30 September 2021

• Updated industry leading decarbonisation roadmap, with US$6.2 billion capital investment planned by 2030 to eliminate fossil fuel risks, saving an estimated US$3 billion by 2030 and rising to annual savings of US$818 million once fully implemented

• Iron ore shipments of 47.5 million tonnes (mt) in Q1 FY23 were four per cent higher than the prior comparable period and a record for a first quarter

• Average revenue of US$87/dry metric tonne (dmt) for the quarter, realising 85 per cent of the average Platts 62% CFR Index

• C1 cost of US$17.69/wet metric tonne (wmt), three per cent higher than the previous quarter with a focus on mitigating industry wide cost pressures, including fuel costs

• Cash of US$3.3 billion (net debt of US$2.8 billion) at 30 September 2022 after payment of the FY22 final dividend of US$2.4 billion and capital expenditure of US$653 million in the quarter

• Fortescue Future Industries (FFI) entered a collaboration with Tree Energy Solutions which aims to accelerate development of a green hydrogen and green energy import facility in Germany

• FFI and Incitec Pivot Limited (IPL) progressed planning for the conversion of IPL’s Gibson Island ammonia facility to run on green hydrogen, commencing Front End Engineering Design

• FFI established a U.S. Technology Hub and announced partnership with the U.S. Department of Energy’s National Renewable Energy Laboratory
• Guidance for FY23 shipments, C1 cost and capital expenditure remains unchanged
.
View attachment 148513 September 2022 Quarterly Production Report (PDF 329.6 KB)

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One point in the report that is often over looked by the average punter is the realisation rate.

FMG sells ore to at is below the 62% bench mark, so the price their Ore sells at is discounted.

A year ago they were receiving less than 70% of the bench mark price close to a 35% discount. Last quarter it narrowed to 22% discount and this quarter it was 15%.

A narrowing discount is good news for FMG, as it offsets some of the price decline in the Bench mark price (bench mark price is still very good though)

Anyone feeling courageous ? Or seeing a bargain ?

FMG currently at $14.88. I reckon it has hit a number of stop loss points and automatic selling has accelerated todays fall.

I'm like a stunned mullet, basilio

basilio said:

Anyone feeling courageous ? Or seeing a bargain ?

FMG currently at $14.88. I reckon it has hit a number of stop loss points and automatic selling has accelerated todays fall.

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Well why is FMG's price getting slammed? Iron ore prices are fast approaching late 2021 support levels, and this time there is a risk of a global recession.

basilio said:

Anyone feeling courageous ? Or seeing a bargain ?

FMG currently at $14.88. I reckon it has hit a number of stop loss points and automatic selling has accelerated todays fall.

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Absence of evidence is not evidence of absence for a good reason causing the fall in FMG’s price.

I’ll keep my gumnuts safely stored and see what happens at this point in time.

gg

I didn't win the power ball unfortunately but ill put in a order for 13 on Wednesday, the odds are still better then power ball