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Andrew Forrest’s Fortescue wants to do a deal with the traditional owners of a large swath of the area it mines in the Pilbara as court hearings to determine the compensation it must pay, which could top $500 million, start in August.
Fortescue Metals chief executive Fiona Hick said the miner was ready to pay compensation to the Yindjibarndi people to settle the dispute.
Andrew Forrest and Fortescue Metals chief executive Fiona Hick at the Iron Bridge magnetite project in the Pilbara.Credit: Peter Milne
“We’re certainly working to resolve the matter, and we would like it resolved as quickly as possible and preferably outside the court,” Hick said when presenting quarterly results on Thursday.
In 2020, the High Court denied the miner leave to appeal against a full Federal Court decision that the Yindjibarndi people had exclusive native title over about 75 per cent of Fortescue’s Solomon Hub, which can produce about 75 million tonnes of iron ore a year.
Two years later, after unsuccessful negotiations on what compensation Fortescue should pay, the Yindjibarndi Ngurra Aboriginal Corporation asked the Federal Court to determine the compensation. Possible compensation exceeding $500 million has been reported.
A settlement would have to be reached soon for Fortescue to avoid public Yindjibarndi testimony, due to start in the Pilbara in the second week of August.
A week ago Fortescue celebrated its 20th anniversary: a storied journey that made it a $71 billion company with 20,000 employees and founder Andrew Forrest one of Australia’s richest people.
Hick said Fortescue’s iron ore production of 192 million tonnes for the 12 months to June was the fourth consecutive year of record shipments.
On Monday, the first cargo of magnetite from its Iron Bridge project was loaded in Port Hedland, but the project is now not expected to reach full capacity until mid-2025.
Hick, who joined Fortescue from Woodside less than a year ago, said Iron Bridge – which uses an energy-intensive method to process low-grade ore into magnetite containing 67 per cent iron – was the company’s most complex project yet.
Fortescue’s hydrogen-focussed energy arm has its own project challenges after chief executive Mark Hutchinson in January targeted making five final investment decisions this year.
Hutchinson said a project in Arizona to supply 12,000 tonnes a year of green hydrogen for trucks bought just a week ago for $US24 million ($35 million) could be the first to go ahead.
Another contender is possible green ammonia production at Incitec Pivot’s Gibson Island plant near Brisbane, with detailed design on track and negotiations for renewable energy supply, electrical connection and water supply under way.
“We’re on track to do five by the end of the year,” Hutchinson said.
CSLA analyst Robert Stein pointed out that Fortescue would need 1250 projects the size of the Arizona one to meet its aim of producing 15 million tonnes of green hydrogen a year by 2030.
Hutchinson said the first five would be “priming the pump” for expansions and new larger projects, and the target would be achieved with other investors and project financing as well as Fortescue cash.
“There is a wall of money out there waiting for projects,” he said.
Fortescue shares dipped 3.4 per cent to $22.92 a share on Thursday.
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