Ground Breakers: Twiggy appoints himself as head coach at Fortescue

It’s the sort of thing normally reserved for lower league European football clubs.

A club sacks its manager and announces an extensive search for the gaffer who will take them to the promised land.

The owner then turns around and hires the football director in charge of the process to begin with, who has recommended that none of the candidates can match their tactical brilliance.

Although in this case the coach, owner and football director are one and the same.

So it is that Fortescue Metals Group (ASX:FMG) has ended an extensive worldwide search for its next CEO with its billionaire founder and top shareholder Andrew Forrest returned to the head of the company for the first time since stepping aside as CEO for Nev Power in 2011.

Forrest, already the owner of around 36% of FMG, will become executive chairman and run the world’s fourth biggest iron ore miner again. He’ll run the 180Mtpa iron ore business after Elizabeth Gaines finishes up in August 2022 until a permanent CEO can be found.

It comes as, on Forrest’s direction, the company expands its interests in decarbonisation, hydrogen and green energy.

To that end Fortescue Future Industries boss Julie Shuttleworth will be shuttled into another worthy role as an as yet untitled senior executive while General Electric’s former Europe president and CEO Mark Hutchinson becomes the new FFI boss.

Once a new iron ore chief is in place both roles will report to Forrest, whose grip on the company only seems to have gotten tighter since the start of his green energy crusade last year.

The period has seen a big turnover in senior executives amid rumours of discontent over the company’s decision to cap bonuses during the iron ore boom last year.

More changes at the top

Outgoing CEO Elizabeth Gaines will remain with the company as a non-executive director and brand ambassador for FFI.

Also coming on board will be Chinese hedge fund director and BlackRock China board member Yifei Lei, boosting the company’s female board representation, while former AGL CEO Andrew Vesey will be appointed FFI’s head of energy transition projects.

McKinsey Perth partner Christiaan Heyning will become FFI’s head of decarbonisation, while technology executive Jalal Bagherli and FMG deputy chairman Mark Barnaba will become co-chairs of FMG’s recently acquired Williams Automotive Engineering business.

On announcing his own appointment today Forrest put the focus squarely on the iron ore miner’s energy transition strategy.

“Australia, while being the global laggard in climate change policy and business support, has some of the world’s best concurrent solar and wind, entrepreneurial and project development skills as well as free democratic institutions and government,” he said.

“These were the reasons why FFI recently secured an MoU with Germany’s lead energy company to be its lead green hydrogen supplier.”

He said, with typical bombast, that FMG would “prove that going green has a fabulous and profitable future, providing significant additional value for shareholders by ramping up innovative and game changing green technologies, green operating know-how and sharing that and our future massive green fuel supply to the world.”

“We are doing the hard work to genuinely decarbonise Fortescue, avoiding the temptation we see all around us to greenwash,” he said.

“I wish to specifically congratulate Rio Tinto and BHP for their efforts in their own inevitable decarbonisation journey.

“For those remaining in the private and public mining and energy sector who ignore the world’s need to change, you do so at your ignorance and peril.”

Forrest noted as well the company’s growing shareholder base, something that has raised eyebrows from analysts who have suggested smart institutional money could be getting replaced with less experienced retail buyers.

The Perth tycoon said the shareholder base had doubled since the launch of FFI, with investors “ranging from top tier institutional banks to grassroots investors”.

Fortescue Metals Group (ASX:FMG) share price today:

Steely outlook for BlueScope

Sky high American steel prices have brightened the outlook further for BlueScope (ASX:BSL), which posted its strongest ever profit as a standalone entity last year amid the global economic recovery from Covid-19.

BlueScope today said it expects underlying earnings before interest and tax for the second half of FY22 to range from $1.375 billion to $1.475b, above the previous $1.2-1.35b guidance.

The company said its outlook is driven by improved earnings at its North Star and North America coated steel business due to higher prices and spreads in the States.

Supply chain disruptions have kept a dampener on the Australian steel products business despite stronger realised steel spreads.

“Throughout recent macroeconomic and geopolitical volatility, BlueScope has continued to demonstrate strength and resilience in its business performance,” BlueScope MD and CEO Mark Vassella said.

“In the current strong demand environment, the entire BlueScope team is working as hard as they can to improve our service levels, which have been impacted by supply chain and pandemic-related disruptions.”

BlueScope deliver a record full year underlying NPAT of $1.17 billion in FY21, a figure it is well on track to beat after generating underlying NPAT of $1.57b in just the first half of 2022.

Coincidentally, new FFI chief Hutchinson has also stepped down from the BlueScope board today in preparation for his move to Fortescue.