Fortescue Ltd

Thank you and welcome all. It's great to be back with you again. I'm here in London and joining me is Mark Hutchinson, an Apple Padgett CFO. Last month, we presented our quarterly production results, which included our highest ever first half shipments of 97.1 million tonnes. We did this while achieving an outstanding safety performance with a significant improvement across all our safety indicators, including a 44% improvement in truth. We remain on track to deliver our FY25 guidance, despite recent weather events in the Pilbara, including cyclone Zelia last week. The team was well prepared and did a phenomenal job in managing its impacts, working hard to resume normal activities as safely and quickly as possible. Apple will talk to the financial shortly. However, there were a few results I wanted to call out. We continue to keep our costs low. achieving a hematite C1 of 19.17 a tonne in the half, delivering a strong underlying EBITDA of 3.6 billion and a net profit after tax of 1.6 billion. Reflecting these results, the board today declared a fully franked interim dividend of 50 Aussie cents per share, representing a 65% payout of net profit after tax and a return of 1.5 billion Aussie dollars to our shareholders. There were many highlights during the half. Our Billion Opportunities Program has now awarded $6.5 billion Australian dollars in contracts to First Nations businesses since 2011. We continued to ramp up Ironbridge with more than 5 million tonnes of high-grade magnetite concentrate now shipped to our customers since operations began. We commenced construction on our green metal project at Christmas Creek with first production on track for later this year. And we continue to work closely with Chinese steel mills and renewable energy companies to further define and partner on developing an Australian-China green metal supply chain. Our decarbonisation plan also went from strength to strength with a $2.8 billion contract signed with LIBA for zero emissions mining equipment. This will see more than a billion dollars of revenue flow back to Fortescue Zero for providing the battery power systems. Our recent deal with XCMG to purchase over 100 pieces of zero emissions heavy mobile equipment marked another step in our journey to real zero. And we also commissioned a 100 megawatt solar farm, the first of around 1.5 gigawatts we'll build before the end of the decade. On Ironbridge, we are continuing to learn every single day and the facility is improving month on month. December, we had our best month to date with concentrate production annualizing at around 9 million tons. The schedule for operating at nameplate capacity, though, by September 2025, as we announced today, is under review. An assessment is underway to optimize the performance of the air classification circuit and downstream aero belt conveying system. This assessment is anticipated to be completed in Q4 this year. Before handing over to Hutch, I'd like to give a huge shout out to the entire Fortisview team and all of our partners for their huge effort this half. It's been a strong half with record production, outstanding safety performance, all while continuing to keep costs low. On that note, I'll hand over to Hutch.

Thanks, Dino, and hi, everybody. Our energy business continues to be agile, innovative, and disciplined in the way we approach a very dynamic global energy market. Our view remains the same. The world needs abundant renewable energy. Recently, the head of the International Energy Agency said electricity demand will increase six times faster than total energy demand over the next 10 years. Where is this going to come from? It won't all come from gas, and our firm belief is it will predominantly come from renewables. We have been focused over the last six months on advancing and commercializing our portfolio of green technology. Technology is key to everything we're doing to decarbonize. To capitalize on that, Fortescue Zero is evolving from the engineering service the company required a few years ago to a customer-driven, profitable product business. The $2.8 billion deal Fortescue signed with Lever has a big flow-on effect for our technology business, with Fortescue Zero supplying the power systems to hundreds of zero-emission pieces of mining equipment. This does mean, as Dino said, that a significant amount of that value will come back to the company. Liebherr and Fortescue will also deploy an autonomous battery electric haulage solution for large-scale mining operations. There is a huge value in the IP we have created, and this presents a significant commercial opportunity for what we're doing at Fortescue Zero. Let me turn to green energy projects. We are continuing to progress and refine our green energy portfolio in a very disciplined manner and remain fully committed to green energy and large-scale industrial decarbonization. As you've heard me say before, our financial discipline always comes first, and we are only focused on developing projects that are economically viable. While we do remain confident in the long-term viability of green energy, We must be realistic about the current challenges the industry faces. Right now, the world is in an uncertain place. The Trump administration has instructed the federal agencies to pause grant payments under the Inflation Reduction Act. There is considerable uncertainty around Red 3 in Europe and how that will be implemented at the member state level, and we're waiting on the outcome of several elections globally. However, our firm belief is that the world needs an enormous amount of green energy and so we will not be pulling back from our ambitions. That is why we continue to maintain our portfolio projects and only execute on them when they make any economic sense. This does include looking at the timelines on the FID projects we have previously announced. These changes are what happens when you have an unstable government policy which creates uncertainty for investors. To be clear, our timelines may change, but our ambitions will not. We anticipate having more clarity on these external factors by the end of the financial year. As you heard Dina say earlier, we are still on track and progressing our Christmas Creek Green Metals plant, where we'll use the green hydrogen we're already producing on site. Feasibility studies and planning approvals will continue to progress for our projects in Norway and Brazil, and there is still plenty to be excited about, and we know what we have done over the last few years in the energy space has set us up for long-term success. Right now, we are focused on making business decisions that make sense commercially and delivering the best value for our shareholders. So let's go now to Apple to deep dive in the financial results.

Thanks, Patrick, and a big hello to everyone from London. It remains a privilege for me to step you through the financials, and you can see from our announcements today that we have reported another set of clean accounts. Turning to the results, first half revenue was $7.6 billion, which was 20% lower than the same time last year as the hematite realized price decreased by 21%. Our costs continue to be impacted by mine plan-led cost escalation and market inflationary pressures, and the first half C1 for hematite was up 8% year-on-year. We remain very focused on cost discipline and are tracking well against our FY25 guidance. EBITDA was $3.6 billion on an EBITDA margin of 48%, with the metals EBITDA margin of 54%. The metals segment EBITDA was $4.1 billion, or $47 a tonne, and the energy segment EBITDA loss was $365 million, in line with the four-year guidance of $700 million. EBITDA flows through to net profit after tax, which was $1.6 billion in the half. For those on the webcast, you can see from this slide the reconciliation of the year-on-year change in impact, with all the moving parts, including the significant price impact on EBITDA. One item to call out here, and as we highlighted in the FY24 full-year results, the increase in depreciation and amortization relates to the lagged impacts of several years of high-sustaining capex together with the commissioning of new assets, and in particular, Ironbridge. The slide shows the variance relative to H1 last year, but in fact, depreciation was flat half and half. Moving to cash flows, net operating cash flow declined to $2.4 billion, and free cash flow was $0.7 billion, and that's after investing $1.8 billion in capital expenditure. The capital expenditure comprises $1.6 billion in metals and $145 million in the energy segment. The details are on this slide and I note the 1.3 billion of sustaining and hub development capital includes 235 million of fleet deposits. Our FY25 guidance for metals capital expenditure has been revised to a narrow range of 3.5 to 3.8 billion, previously 3.2 to 3.8 billion. The revisions include sustaining and hub development capital increase from timing of fleet deposits to 2.4 to 2.6 billion. Also, a revision down on decarbonisation based on phasing of spend of US$500 million. And finally, the inclusion of the Redhawk mining transaction, which will be approximately US$160 million. Today, we reduced the FY25 guidance for energy capex to $400 million from $500 million, and that is the result of lower spend on green energy projects, as you've just heard from Hutch. As reported last month, our balance sheet is in great shape. Cash on hand at 31 December was $3.4 billion and net debt was $2 billion. And you can see Fortescue's robust credit metrics on this slide with the gross debt to EBITDA of 0.6 times and gross gearing of 22%. These credit metrics show we clearly have balance sheet capacity within our threshold leverage metrics of no more than two times gross debt to EBITDA and no more than 40% gross gearing through the cycle. A strong balance sheet is core to Fortescue's capital allocation framework, as is our commitment to return capital to shareholders. And as you've already heard from Dino, the board has declared an interim dividend of 50 Aussie cents per share. This represents a payout of 65% of NPAT and is consistent with our dividend policy to pay out 50% to 80% of NPAT. In closing, we have achieved strong financial results in the first half, and are well positioned heading into the second half. I'll hand back to the operator, Rachel, to facilitate the Q&A session. We will welcome your questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Please note that we ask participants to limit themselves to two questions and if you have any further questions you may rejoin the queue. Your first question is from Rahul Anand from Morgan Stanley. Please go ahead. Your next question is from Khan Pekka from RBC. Please go ahead.

Good morning, Andy, Dino, Apple and Hutch. Just on Ironbridge's 22 million tonne ramp up, is that referring to not being able to achieve that nameplate capacity or talking to a slower ramp up? And would that air classification circuit really have to do with recoveries? And I'll circle back with a second. Thanks.

Yeah, thanks, Khan. You're right, it's timing at this stage, and we'll reissue guidance around timing of nameplate in Q4. I actually have Graeme Howard on the call who heads up the operations as well and can talk about the product splits around air classifications.

Yep, thank you. It's Graeme here, sorry, coming in from Perth. The dry circuit, or specifically the air classification circuit, is ultimately the last circuit before we get to the wet plant. And it's purely just designed to remove some further silica from the product to gain that beneficiation that we require. The material sizing in that circuit is about 80 microns. So when the material is at that 80 micron, it becomes wet and goes into the wet plant. And if it's not at that size, we recirculate until it is. So that's what it's designed to do.

Sure, thank you. And the second one, the Red Horde acquisition. Can I just ask what drove this, assuming it's replacing depleted rock and ore from Firetail, and does it change the expected phasing of the replacement hubs, Mindy South and also Nittanyou? Thanks.

Yeah, thanks. Good question. They ran a process towards the end of last year. We participated in that. We've been successful, reached the 90% compulsory acquisition trigger this week and now we'll look at the impact on our long-term mine plan.

Thank you. The next question is from Paul Young from Goldman Sachs. Please go ahead.

Thanks. Good evening, team. Good to connect. First question is for Hutch. Hutch, just on, I guess, the pause at Phoenix, the Phoenix project in the US. you just maybe just tell us how much you actually spent on that project. And then secondly, just an update on Norway and Brazil, and does this really just turn the focus on trying to accelerate those projects? And I know you've said previously that, you know, what sort of power price you require, and also they require government subsidies as well. But just curious about the overall strategy, thanks, on grant money now.

Yeah, look, thanks so much for the questions. Look, I think the US is, in an interesting place with the Trump administration. We're really analyzing what that means for projects in the U.S. at the moment, and it may impact the timeline on the Arizona project. The Trump administration has been a flurry of executive actions. Some sections of the IRA from the grants have come into question, including the hydrogen production tax credit. So until we really have a much clearer view on that, being quite cautious about what we're doing. We've spent about one-fifth of the capex on Arizona at the moment, and I think originally it was 150, sorry, 550, my apologies, 550. So, you know, we're being very cautious, as I've said, and very disciplined about the money we spend there until we know exactly what happens to that market. On the rest of the globe, we're progressing with Holman Essard and Pessam. We're in the feasibility stage and getting for approvals. We have some... Some very kind of favorable, I believe, power costs there from Hydro, which is fully firm. That's why we're focused on those two projects. And we're now putting the rest of the pieces together. But we're not going to bring them to the board until we really believe we've locked in the buyers as well. We're having discussions with off-takers. There's uncertainty globally for them too. And until we have a project which is economically viable, we won't take those to the board.

Okay thanks Mark and then maybe a question for Abul just on sustaining capex and those fleet deposits I presume for the heavy haul trucks etc. Can you just step through that and then why they came in a little bit earlier and then any colour you can provide on just total capex on fleet replacement over the near to medium term?

Thank you very much. The fleet deposits show up in the cash flow statement for the H1 and you can see that that's $235. But we've mentioned previously our transition of diesel mining fleet to zero emission fleet. And we've signed several partnerships with several manufacturers, including Lieber and XCMG McLean. And you're right, the agreements involve securing build slots and paying deposits, which is shown in that investing cash flows, as I mentioned. And for simplicity and transparency, we have included these deposits in our capital expenditure breakdown for the FY25 guidance. In terms of fleet replacement, we're looking at over 800 units over the total life, well, up until FY30. It's going to be lumpy over time, but you'll anticipate that it will come through with our guidance over the next few years.

Thank you. The next question is from Rob Stein from Macquarie. Please go ahead.

Hi, team. Just a technical one on contingent liabilities. The Yinjibani claim has gained a bit of press lately. When does that start to move from something that's been negotiated, settled into a contingent liability, just from an accounting point of view?

Thanks Rob. I'll start and then Apple can add around the liability provisions. Look, as the matters before the courts, our final submissions are due this week. I won't comment on specific details on the amounts that we're hearing about other than to say that we've never shied away from the right compensation outcome. Apple, over to you on the treatment.

Yeah, thanks. And as you know, look, it is a contingent amount at the moment, but we won't be disclosing anything unless and until the compensation becomes a lot clearer.

Okay, thank you. And then just one on Ironbridge. Obviously, TC Zelia sort of flowed through the region. Were there any impacts to the operation? Obviously, water's been an issue. um at site due to lack of it you've had a fair bit of it um how do you sort of think through um you know the impacts of that on any type of water issues at site i love the silver lining on uh a cyclone cloud uh water banking strategy that's right so yeah you're right we've got a lot of water on site and um that's probably the

The short story of what's happened last week in terms of the impact to the iron bridge operation, it wasn't on the direct line of the cyclone, but as you can imagine, there's significant water as all the iron ore players have reported recently. Thank you.

Thank you. The next question is from Lachlan Shaw from UBS. Please go ahead.

Good evening Dino, Apple and team, Hutch. Thanks for taking my questions. Two from me. So just on the green energy piece and I'm just interested obviously with the re-phasing re-emphasis, we've seen in terms of types of projects, we've seen a lot of progress recently around battery-backed solar and wind globally economics are improving there underpinned by ongoing deflation and battery costs. I'm just wondering, you know, when you sort of look at the variety of projects in front of your hutch, you know, when do you sort of maybe tilt a little more towards battery-backed solar and wind and maybe a little away from these more distant green hydrogen, green ammonia type projects? I'll come back in a second.

I think, great question. Thank you. We are always looking for ways to decrease the cost of what we're doing, whether it's battery, solar, wind, green ammonia, and we continue to reassess how those costs continue to come down. Ultimately, where we want to get to with our green projects is to make them competitive with grey. That's the end goal here, and we're working very diligently on that. And when we look at solar batteries, wind, looking at the variable, we're doing that in the Pilbara as we speak with our decarbonization plan. So that's actually being rolled out. We're looking very carefully at how we bring those different elements in. And as we shift eventually to green metals, that's going to play a big part in how we make that economically.

Okay, got it. Thank you. And my next one is just for maybe Apple. So just on the CapEx, and again, just to follow up on the sustaining and hub development increase, you've broken out the splits there in terms of the spend in the first half. Is it fair for us to kind of take those splits forward for the remainder of the capital guided for FY25 and maybe into FY26 too? Thank you.

Yeah, I'd say that in terms of the deposits, it's pretty similar in the second half as well. For the following year, look, good try. We don't guide until a few months later.

Thank you. The next question is from Rahul Wanand from Morgan Stanley. Please go ahead. My apologies, the next question is from Lyndon Fagan from JP Morgan. Please go ahead.

Oh, hi, everyone. Look, the first one I had was just on that billion-dollar revenue flow back to Fortescue. I just wanted to explore that a little further. Is that just simply Fortescue Energy paying Fortescue Metals, or is there any third-party revenue coming in there? I'm just trying to see if that's just out of one pocket into the other. And I guess related to that, it would be really nice to see the 700 mil OPEX in energy become EBITDA neutral. Just any update on when you foresee that might be the case. Thanks.

Thank you, Lyndon. Look, the billion-dollar revenue is third-party revenue and, of course, there'll be cost of goods sold associated with the appropriate margin recognised in Fortescue Zero and, of course, in our consolidated group because it's third-party. Just bear in mind that that is spread over the next few years. In terms of EBITDA, we are looking at a loss that we have reported at the moment, which is $365,000 for the half where there's no change to guidance of about a $700 million net EBITDA loss. In terms of when we are hoping to change that into a positive situation, obviously a lot quicker with things like our EBIT contract and it will be over the next few years.

Sorry, just to clarify that billion dollars of revenue, Fortescue Metals is paying energy for the technology sale or Fortescue Zero, I can't keep up with all the terms, I guess, but can you split the Fortescue kind of component of that revenue versus what you're expecting to get from third parties?

Yeah, look, Mark here, I think the way to look at it is we We sell the power systems to Leva, and Leva sells the trucks to a third party or to Fortescue. And you can see by the percentage of the billion dollars that Xero gets of that contract, as a percentage of the contract, how that relationship is going to be going forward for third parties as well.

Okay, thanks. I might take it offline. And then just back quickly on Ironbridge. Dino, I guess you've been pretty confident in the process and product spec up until, I guess, this release where we're seeing a bit of a delay. What's changed since the quarterly to sort of announce that?

Yeah, Lyndon, still confident, mate. And the ramp-up by any measure has gone actually great. exceedingly well. We have, though, announced, as you said, we're reviewing timing for nameplate. We are working through, as we stated, a key part of the process plant in the dry circuit, which is the air classification area. It consists of 12 separate units. As we mentioned last time on the call, we started the rectification of that work internally And as we're bringing them online, it's taken a little bit longer to get them up to the production rates we want. So we just wanted to be transparent and open on the call today with where we're at.

Thank you. The next question comes from James Redfern from Bank of America. Please go ahead.

Hi, everybody. Thank you for the call. Just a quick question on the blacksmith project that you're acquiring from Redhawk Mining. The feasibility study talked about production of 5 billion tonnes and 60.5% iron ore grade. Just wondering if we should be using that feasibility study just for our modelling purposes or if you think that you can bring the cost down or increase production and so on. Thanks, Dina.

James, thanks for the interest in Blacksmith. We haven't yet got our hands on the ground actually, so we're going to assess it. Obviously, when you look at the strategic ownership, we kind of placed well based on the proximity of our other deposits in the area. So we'll look at how we integrate that best and the timing of it most importantly for us. Okay, thank you. That was all for me.

Thank you. The next question is from Rahul Anand from Morgan Stanley. Please go ahead.

I'm going to try a third time, guys. Hopefully I'm through this time. I'm having some troubles with the desk phone. Apologies in advance if any of these is repeat, but I heard some of the questions and I wanted to perhaps have a conversation around the underlying markets and how you're seeing them currently. Obviously, Chinese steel has come back to moderate profitability, and you've seen a bit of an expansion in your discount for the lower-grade products. I just wanted to touch upon how you're seeing the market in general, especially with a focus on how you see domestic production of both steel and iron ore in the Chinese domestic market. I see the total steel inventory is still tracking a bit below the last five-year levels. And in terms of domestic production of iron ore, that also seems to be a bit weaker. Any sort of anecdotes that you're hearing from your customers as to what's to expect in terms of both the demand of iron ore and house deals progressing there? Thanks.

Thanks, Raoul. And it's so great that you've made it through on the third time lucky. You've called it out exactly how we see it. It's relatively flat. There's some green shoots, then there's some headwinds. All I can say is that our product suite's moving very, very well. I have Ben Cookle, the head of marketing on. Ben, is there anything you wanted to add?

Thanks, Dino. Thanks for the question. Yeah, look, I think the only thing I would add is that we're just still sort of in a period of time between Chinese New Year and the major political conferences that happen in March, the market, I think, broadly speaking, is moving a bit sideways, waiting on sort of those announcements that will come in March. But at this point in time, no major sort of movement either way.

Got it. Okay. And look, just a second one from me on Ironbridge, please. I just wanted to perhaps test on some of the critical elements as we sort of progress through the ramp up. Obviously, we had some initial hiccups and we've gone and addressed them and expecting the ramp up to go smoothly from here. But if I had to take the other approach and say, what are the key risks here that you see in terms of your ramp up besides, I guess, water, which you have addressed? Are there any key elements beyond that? in terms of this project that you see as critical elements for you to get to that nameplate?

Thanks. Yeah, we said technically in terms of the process flow, big tick, we're really, really comfortable with that. Then it was executing the actual project completion, which we're now into, and then the third which we're right in the middle of. It's a big, complex plant, as everybody knows. Proud of the capital intensity that we've deployed on the plant, but it's now Graham and the team is just head down, bum up, working through the challenges that you'd normally expect for this big, complex operation. It's really difficult to call out one particular thing as the team works through the current challenge, which is the air classification. It's I would say it's one of the larger pieces of work that we need to work through. And what we then do in parallel is work through the sequence of other bottlenecks as we ramp up to nameplate.

Thank you. The next question is from Glyn Lawcock from Baron Joey. Please go ahead.

Good morning. A few clarification questions. Sorry. Can we just confirm the Ironbridge, the nameplate is not in question at the moment. It's just purely the ramp-up schedule?

Good to hear from you, Glenn. Yeah, exactly right. So it's timing.

Okay, cool. Thanks. And then one for Hutch. Hutch, I think I heard you say on the call that you won't go ahead now with the Norway project unless you've got the offtake. You had previously indicated that you might... you know, lost lead with a billion dollars. Is it the customer that's moved further away now from where you needed the price to be or is it you've become a lot more conservative with the balance sheet and, you know, being more prudent with what you spend? Thanks.

Yeah, thanks. We never actually said anything that we'd take that just on balance sheet. That project by itself, you know, unhedged and with no offtake has always been part of being very disciplined on the bigger projects. Holmaness and PESM are bigger than the original ones we went to FID on. I would say we continue to be very disciplined and will not take projects that don't stack up to the board. So we continue to do that.

Thank you. The next question is from John Bishop from Jarden. Please go ahead.

Good evening, guys. Thanks for taking the questions. You announced in 2022 a $6.2 billion budget towards renewable power infrastructure. I'm just wondering where that physically is at today in terms of permitting construction rollout, et cetera?

Yeah, thanks, John. We're basically a third, just a bit over a third of the way through now. You did highlight the one area that we're putting a lot of attention on is approvals, particularly on the solar farms that we need to build. But the equipment side, the generation side, the distribution side is all absolutely well on track. We announced two key contracts this quarter with Liebherr and XCMG, and that really rounded out the design of our entire fleet. and we're about to roll out the distribution and charging networks over the ensuing couple years so now all on track actually and hope to report a lot more detail soon on the progress.

Excellent that's a great segue because my second question was in terms of the HME and support equipment that you've ordered what's being taken at site at the moment, and I guess probably more interestingly, how are you seeing the relative performance of those pieces of kit on that basis relative to the incumbents?

Fantastic question. So the first point I'd make is we've actually already started to take delivery of a diesel-electric fleet from Liebherr and we have a number of those machines already running and you can imagine that half the technology that we need for a full battery electric truck is now already operating in the Pilbara. We've deployed our software solution which is a real key part of this so we actually have launched our own fleet management system which will all have autonomy enabled as well. We have four fully electric excavators running and the performance that we're getting is actually a lot better than expected with the excavators. So we're learning a lot in terms of power consumption. We have two prototype 240-tonne trucks running around. One's a hydrogen fuel cell and one's a full battery electric And that is going into the modeling of the entire system. It's great to be here in London. We visited the Oxford Banbury site where we're manufacturing our power systems and we sent our very first power system to Lieber, which will go into the very first fully battery electric all truck. That will come later this year, I believe, into the operation. That's on the equipment side. The other exciting announcement we made was the partnership with McLean, which is an underground mining equipment supplier. We're bringing them to the surface mining operations and they'll have a fully electric 24M sized grader that we're working on together. I saw the prototype just recently and it looks bloody fantastic. No, we're really encouraged by it. And lastly, the charging infrastructure and the charger, the high-speed charger that we've been developing ourselves is ready. We're proud to say that it'll have a six megawatt charging capacity, which is a revolutionary design and technology in the market. So well positioned, John.

Thank you. The next question is from David Coates from Bell Potter. Please go ahead.

Good morning, everyone. Thanks for your time this morning. Quick one. Firstly, on capex and dividends, just notionally speaking, with the reduction in capex on the energy and decarbonisation projects put less pressure on free cash flow and enable perhaps higher dividend payout ratios to be maintained for longer.

Thank you, David. Look, our dividend policy and payout is a matter for the board and we'll pay within the 50% to 80% range. You know, if you've got less capex, you've got more free cash flow, but it will still be within that range.

Thanks. And just circling back on marketing, just wondering if there's any work going on to sort of diversify the customer base further away from China at all?

Yeah, thanks, David. We've been attempting to diversify our book for the last few years. In fact, Ben and the team have done some great work into Europe. The reality, though, is China still supplies circa 80%, 90% of the world's total steel. So our key customer still is in China.

Good morning everyone.

I was wondering just following on from your comments around US policy support for your projects, are you seeing any opportunities as well potentially emerging around critical minerals or anything that might fit within your portfolio? I guess the second one to follow up would be just Looks like there's new commentary, or I think it's new commentary around inclusion of shared buyback commentary in your report. Just wondering if that was signalling anything that you're actively thinking about?

So the commentary on shared buyback is not new commentary. Just on the critical mineral strategy, interesting point. So we are exploring in that Latin American region for a couple of the rare earths. So certainly we see a feeder into the US market there being pretty important to support the macro market for critical minerals. And at this stage, we don't have a large presence in the US, but we do have a presence in Canada. looking for exactly these minerals.

Thank you. The next question is from John Tumasos from John Tumasos Very Independent Research. Please go ahead.

Thank you very much. I'm trying to peruse the RedHawk website. and understand the project that we're taking over. I see there's a 49 page pre-fees. The last pre-fees I read was 701 pages. This looks a little skimpy. And they were going to have contract mining, contract crushing, contract trucking, public roads, public ports. In rough terms, Under the auspices of Fortescue, would you expect that the operating costs would be one quarter less or one half less since you have rail and port and pretty good trucks and things like that?

Yeah, good question. John, we haven't done that detailed work, but You can imagine if you're a stranded asset, you're going to have to have all that infrastructure. It would feed into our western hub system, most likely at Solomon and Firetail area. And we're just going to have to assess whether or not that's a hauling solution or a conveyor extension for Firetail. But you're right, our interests peaked because of clearly the invested capital we already have in that region. Thanks, John.

Thank you. The next question is from Giles Parkinson from Renew Economy. Please go ahead.

Yeah, hi. Yeah, a couple of clarifying questions, probably for Mark. One, you mentioned that the targets will remain the same and the timelines might shift. Can you specify exactly what you're referring to then? Is that sort of the border, green sort of energy, green hydrogen deal, which might be affected by some political uncertainty overseas? Or does that reflect a set of 2030 targets for real zero at Fortescue, if you can just clarify that? And second one, while I'm on the line, can you just clarify also the battery electric truck that's actually in trial at the moment? You said that the first fully battery electric truck will come later on this year. as you sent the first power system away from the UK to Libre. So is the one that's been tried at the moment fully battery electric, or is it just a referral to the fact that this one will be the first one with a 40-skew power system? Anyway, if you can clarify those two, that'd be great. Thank you.

Thanks, Joe. Athena here. I'll take the first one on the truck and hand over to Hutch. Just to clarify, the Roadrunner truck was our prototype fully battery electric that will form the basis of the production unit. And that's what I was referencing to the power system that goes to the Leber factory to then make the first production unit.

Yeah, thanks so much, John. I think our plans, our goals on the decarbonisation of the company has not changed, 2030, 100%. So what we're looking at is not delaying anything. We're just going to reassess some of the timelines to some of the projects we went to FID on. And Arizona is a good example given what's happening with the Inflation Reduction Act. So it's really reassessing those timelines and our ambitions on the DCARB is different and that has not changed.

Thank you. The next question is from Tom Zornmayer from Business News. Please go ahead.

Morning everyone. I have a question around water, particularly at Iron Bridge. I mean you've got a few pastures up that way, barely missed the amount of water you've been allocated from Well Island. We've got a lot of PO groups around the Pilbara really starting to rattle the cage about resources industry's use of groundwater and extraction of groundwater. I wonder if there's much work going on in Fortescue around, I guess, how to reduce that water use at Ironbridge and how to re-inject more of the water you are using back into the aquifers.

Yeah, thanks Tom. Good technical questions around Ironbridge and you highlighted one of the key issues we need to manage there is water balance. Good news is we received the second abstraction license from the aquifer to take us to the full 20 gigaliters a year that we require. You've got a view on the pastoralist perspective. We work extremely well with our pastoralists around the Canning Basin up there. So the focus is exactly what you're talking about. It's about recycling the water and water conservation. And with what the team are doing on this water banking strategy, we're utilising a lot more of the water that we have around the sites. And clearly events like the last week do help out. Thanks, Tom. Yeah.

And a second question on the green iron plant. I wonder if you can give an update as to how construction's progressing there and if the timeline you indicated when we first got there last year is still in place.

Yeah, Tom, it's still in place. So calendar year this year for 1,500 tonne per annum plant. It'll be located at Christmas Creek in our green energy hub.

Thank you. The next question is from Brad Thompson from The Australian. Please go ahead.

Hi all. Thanks for your time. Hutch, I just wanted to ask you about jobs in the green energy. Last year when the 700 job cuts were announced, it wasn't made clear how many exactly were in green energy. Just wondering how many of the job cuts were in green energy, how many staff are you carrying at the moment? And is there a prospect of job losses now that there's these new delays on the horizon at Arizona and Gladstone?

Hi, Brad. Thanks for the question. We didn't disclose the job cuts last year. I mean, we've moved to a one Fortescue approach to the business. And so we know our business is extremely integrated now. So I think that's important to understand. You know, we always look for efficiencies in the business and how to use the workforce the best possible way we can. There is no delay of the projects. We're just reassessing the timeline at the moment and we'll let you know later in the year.

Okay, thanks, Hutch. And one for you, perhaps, Zeno, if you don't mind. You know, the Red Hawk acquisition, You know, is there any concern about permitting delays with some of your other projects on your books like Mindy South? And also permitting for your, you know, for the wind farms and solar farms that you'll need to build to hit your real zero targets. You know, how's that progressing? And how are your relationships with traditional owners? And are they... perhaps being impacted by what's going on with the Yindyabandi case.

I need two questions, there's about five in one there, so let me try and remember them all. In terms of Redhawk, the blacksmith project had all approvals already done, so that fits well within the portfolio and allows the mine planning team to work out the best sequencing. We're working exceptionally well with our traditional custodian partners and we have for over 20 years. So the conversations now are including energy potential, not only just mining. Clearly it's a different type of infrastructure that we need to build and also with the state government. We're working really, really close, hand in glove with everybody in Roger Cook's ministry.

Thank you. The next question is from Mark Wembridge from AFR. Please go ahead.

Morning. Brad's actually touched upon most of what I wanted to ask there. Well done, Brad. But just I want to get a little bit more clarity from you guys on the reduced capex and what it means for the green energy. Is this a real pullback from hydrogen?

Thanks, Mark. No, absolutely not. We're still fully committed to hydrogen. What it does mean, we're being very careful and disciplined about the way we spend our capex, given that the environment globally is kind of uncertain. And Arizona, as I said, is a good example of that, where there was uncertainty with what the Trump administration is going to do around the hydrogen production tax credit. And so we will slow the spend down as we become more and understand how that's going to impact that project.

Okay, just got one more potentially for Dino on the latest Mitsui deal that happened over in WA. Just wanted to get your thoughts on what you thought of the valuation for Rhodes Ridge.

We're not going to comment on the Rhodes Ridge acquisition. It's quite a large number, which reinforces the value of the entire Pilgrim region. It's great to see you've got the Japanese taking long-term positions in the Pilbara region to sustain steel demand for the next generation. I think it's fantastic to see.

Thank you. The next question is from Lachlan Shaw from UBS. Please go ahead.

Thanks guys for taking my follow-ups. I just wanted to confirm something from the slide pack. So if I look at pages 12 and 19 together, am I right to infer that the Pilbara solar wind and BESS configuration is now approximately one and a half gigawatts of solar, about a gigawatt of wind and four to five gigawatt hours of battery? Is that sort of the current configuration you're going forward with?

There's no change, yeah.

Thank you. There are no further questions at this time. I'll now hand back to Dino for closing remarks.

I think we can take Simone's question if we want to. It's dropped off already. If not, well thank you very much. Thanks everyone for joining us today. Again, thank you for everyone that's been involved in the success of the half so far. We'll see you next time.