Monsters of Rock: Fortescue avoids strike as AGM passes with a whimper

Fortescue (ASX:FMG) has escaped unscathed from its 2024 AGM, with investors backing its remuneration report and approving the delivery of millions of dollars worth of performance rights for co-CEOs Dino Otranto and Mark Hutchinson.

Large investors had organised against the performance rights issues but garnered less than 12% of proxies against the resolutions for Otranto and Hutchinson.

And after copping a whopping 52% of votes against its remuneration report last year, which controversially included large awards to former executives Elizabeth Gaines and Ian Wells, FMG saw over 98% of proxies voted in favour of the 2024 version.

That means it avoided a second strike and potential board spill motion. A 25% vote against any ASX company’s remuneration report constitutes a ‘strike’.

The event at Perth’s Optus Stadium was light on for questions, with non-executive director Jean Baderschneider copping one open-ended query on its stance on Western Sahara, a disputed territory partly administered by neighbouring Morocco, a country with which FMG plans to work on green energy projects.

Exec chair, billionaire and major shareholder Andrew Forrest copped one question from the Australian Shareholders Association about the reporting of losses from the Fortescue Energy business, saying the company would be able to provide a breakdown in future.

The financial performance of the energy division has been front and centre this year after FMG cut 700 jobs and abandoned long term plans to produce 15Mt of green hydrogen per annum by 2030.

But Forrest’s climate commentary was no less strident than it has been in the past, chastising the UN and calling “Net Zero” an abject failure used by fossil fuel companies to avoid cutting their emissions.

FMG has a US$6.2 billion plan to decarbonise its Pilbara operations and hit what Forrest terms ‘Real Zero’, though analysts have questioned how the project can be completed without seeing FMG reduce its payout ratio.

And on the markets

Meanwhile, the materials sector closed all square with the US election doing little to move stocks one way or the other.

Gold prices will be closely watched overnight, with Donald Trump taking early leads in key battleground States against Kamala Harris.

Comex futures were running at US$2748.30/oz, a little shy of all time highs, but weren’t as sensitive as Bitcoin to the election news, with the leading crypto product up 7%.

Fortescue slid 1.1% but other iron ore producers were only slightly in the red. Lithium stocks were sold off.

The impact of a Trump election win on battery metals and the rollout of EVs in the West will be closely watched if the Republican candidate seals the deal on a second term in office, with uncertainty surrounding the future application of the green energy incentives in the Biden Administration’s Inflation Reduction Act.

Forrest told media at the FMG AGM he didn’t see a Trump Presidency curbing investment in renewable energy, calling the former reality star ‘pragmatic’, and that the US trade relationship with China would continue to be important after tensions between the superpowers characterised the first Trump Administration’s foreign policy.

But he said the company needed clarity around the rules as it progresses a green energy project in Arizona, saying there could be changes to how the IRA is applied.

The iron ore magnate also rebuffed questions about the progress of the Iron Bridge magnetite mine, saying its ramp up was ‘going really well’ despite reports about the impact of silica dust, with mines safety inspectors issuing a number of improvement notices regarding dust controls.

“That’s my first concern always,” Forrest said in response to questions about the safety of employees.

“Honestly, you have a look at the magnetite projects that (have) ramped up around the world, it’s not perfect but it’s going really well,” he said earlier.