No more Green Fortescue.
Andrew "Twiggy" Forrest's Fortescue Metals Group (ASX:FMG) will sack 700 people, scale back its green ambitions, and reintegrate the group into one corporate structure.
A one-page statement to the ASX late Wednesday revealed the plans, previously outlined by Forrest in a message to staff.
The bottom line is that iron ore and metals are back at the forefront of business, and clean green hydrogen ambitions will take a back seat.
The statement to the ASX, however, was somewhat disingenuous. It began with management changes resulting from the restructuring, then went on to outline the proposals: the loss of hundreds of jobs and the revamped structure are the major news.
It stated that the management changes were being made "together with the simplification of its structure to ensure it remains lean, impactful, and agile."
"Fortescue remains resolute in its commitment to be the world’s leading green technology, energy, and metals company with a laser focus on achieving Real Zero by 2030.
"The company has undergone a period of rapid growth and transition, and as part of bringing together Metals and Energy into One Fortescue, initiatives are being implemented to simplify its structure, remove duplication, and deliver cost efficiencies.
"The company must continually evolve to ensure it remains lean and best positioned to deliver on its strategy and generate maximum value for shareholders. As part of this, approximately 700 people from across Fortescue’s global operations will be offered redundancies, with that process to be finalized by the end of July 2024.
"Fortescue is grateful for the contribution of all those impacted by these changes.”
Most of the jobs will be office-based and white-collar, many based in WA and Queensland.
These changes come after BHP pulled the plug on its WA nickel business last week, affecting some 3,000 jobs.
Initially, Fortescue viewed green hydrogen as vital to decarbonizing its own operations. However, more recently, its efforts have almost exclusively focused on electrifying its operations heavily dependent on diesel and ensuring that the electricity used is renewable.
In late 2021, Fortescue targeted producing 15 million tonnes a year of green hydrogen by 2030. That target has now been abandoned, along with Fortescue’s vast portfolio of hydrogen projects it was pursuing globally.
In early 2023, Fortescue committed to making final investment decisions on at least five green hydrogen projects by December 2023. It achieved two: a plant to produce 30 tonnes of liquid hydrogen a day in Arizona and a $US150 million ($223 million) investment in a facility in Gladstone, Queensland.
Analysts said last night that there are two winners from the changes: two executives who have been with Fortescue for 18 months – Chief Financial Officer for Mining, Apple Paget, who will assume that role for the entire company, and Shelley Robertson, who moves from Chief Corporate Officer to Chief Operating Officer.
