Iron ore price weakens as Australia flags return to sub-$100 prices
Futures dropped for a fourth day in Singapore, to trade about 3% lower for the week.
Fortescue Metals Group (ASX: FMG) announced on Monday the unexpected departure of its chief executive officer Fiona Hick, who held the post for less than six months and who attended a corporate party on Saturday to mark the iron ore miner’s 20-year anniversary.
Hick, who was scooped up in November last year from oil and gas producer Woodside Energy (ASX: WDS), has been replaced by current chief operating officer for the iron ore division, Dino Otranto.
The 49-year-old female executive made her name by pushing the Western Australia’s resource sector to address its sexual harassment and bullying issues while serving as president of the state’s Chamber of Minerals and Energy.
Since February, Hick had been in charge of the iron ore mines that likely paid the bulk of the expenses at Saturday’s corporate party and during which nothing was said of her departure.
“Fiona Hick has made a joint decision with the Fortescue Board to leave the company and leaves it in very good hands,” a statement issued on Monday reads. “The departure of Fiona has been both friendly and mutual and we warmly wish her the best for her future.”
The leadership change at Fortescue comes during a period marked by several executive staff turnover at the world’s fourth-biggest iron ore miner, and the recent divorce of its chairman and founder, billionaire Andrew Forrest, after 31 years of marriage.
Media reports speculated that the separation of the company’s biggest shareholders could change control and/or the direction of the company, raising the prospect of a takeover. But Fortescue, which earlier this year split its mining and energy divisions, was quick to disregard the rumours.
These developments, which have created a perception of crisis at the company’s top level, also coincide with Fortescue’s pursuit of growth in new commodities, including hydrogen and clean energy projects.
The changes at the top, which included the addition to the board of Larry Marshall, former chief executive of the Commonwealth Scientific and Industrial Research Organization, were announced shortly before Fortescue posted a net profit after tax of $4.8 billion. The sum represents a 23% fall from 2022 and its weakest annual profit in three years.
Revenue for the fiscal year 2023 was down 3% to $16.87 billion and underlying earnings before interest, tax, depreciation and amortization dropped 6% to $9.96 billion.
Annual dividend per share decreased 15% to A$1.75
The results were impacted by general inflation and a $726 million-impairment charge on the company’s new Iron Bridge magnetite mine, which achieved production in May.
The project transitioned to operational production in August, and the ramp-up period is expected to take 24 months to reach the 22-million-tonne-a-year capacity.
Fortescue’s sustainability report, also released on Monday, showed management let go 56 workers in the past year for sexual harassment, bullying and other workplace misconduct.
The mining giant revealed that breaches of its code of conduct increased threefold and that it investigated 160 cases of potential code breaches compared with 88 in 2021-22, when 16 workers were fired.
Fortescue shares, up nearly 2.1% so far this year, fell slightly over 5% on Monday, closing at A$19.87. This leaves the firm with a market capitalization of A$61.2 billion ($39.3bn).
