‘They were good people’: Forrest opens up on Fortescue exits

Save articles for later

Add articles to your saved list and come back to them any time.

Fortescue founder Andrew Forrest says the clutch of executive-level departures at the iron ore miner is linked to the need to focus on its break into the green-energy industry.

The comments from Andrew Forrest during an interview in Nairobi come after three high-profile executives left the company last week, including former Reserve Bank of Australia deputy governor Guy Debelle. Fiona Hick, chief executive officer of the iron ore division, and Christine Morris, the chief financial officer for metals, have also left.

“We need constant alignment of interest.“: Fortescue Metals Group executive chairman Andrew Forrest.Credit: Trevor Collens

Fortescue, the world’s fourth-largest iron ore miner, last month reported an 11 per cent drop in profits, and investors are bracing for a sharp increase in spending as Forrest spearheads a move to make the company a green hydrogen pioneer. He declined to comment on the specific reasons for the departures, but pointed to a need to maintain focus within the company.

“They were good people, but we need constant alignment of interest,” Forrest said. “It’s difficult to grow a new industry, and it’s difficult to break into a new industry while you’re growing.”

Forrest also hinted at further potential departures, as he referred back to earlier plans to appoint a dozen new executives to facilitate the push into green energy, which will include investments in geothermal power, hydrogen production and the decarbonisation of the miner’s vehicle fleet.

“If you talk about the C-suite, we’re nowhere near 12, and we’re upgrading all the time,” he said.

The drop in the Perth-based company’s full-year profits reflect the struggles of iron ore miners as China’s economic slowdown weighs on demand for the steelmaking material. Since reaching a year-high peak in July, Fortescue’s shares have fallen more than 15 per cent.

With earnings dropping from its main cash cow, Fortescue announced last week that it was abandoning an earlier policy of spending 10 per cent of profits on the green energy arm, with metals and energy projects to compete for capital on an equal basis. Capital expenditure would be between $US2.8 billion ($4.4 billion) and $US3.2 billion for the current fiscal year through June 30, of which $US400 million would go to the clean-energy arm.

More to come


The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.

Most Viewed in Business

From our partners

Source: Read Full Article