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Monsters of Rock: Twiggy Forrest says FMG executives must drive down emissions if they want to keep bonuses
Mining
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- Andrew Forrest tells shareholders executive bonuses will be linked to emissions reductions
- Iron ore miner FMG searching for “critical minerals” for renewables, hydrogen … maybe?
- Lithium and coal stocks rule the roost as materials and energy lift
Iron ore billionaire Andrew Forrest says his miner Fortescue Metals Group (ASX:FMG) will attach long term bonuses to emissions reduction targets in a bid to meet its ambitious decarbonisation goals.
Twiggy returned this year as executive chairman at the head of the FMG pyramid to steer the ship after the resignation of CEO Elizabeth Gaines.
The centrepiece of its plans, alongside green energy business Fortescue Future Industries, is a US$6.2 billion capex plan to remove all carbon emissions by 2030 from its iron ore operations, which shipped a record 189Mt of iron ore in FY22 making them the fourth largest in the world behind Vale, Rio Tinto (ASX:RIO) and BHP (ASX:BHP).
“Today we’re announcing that we’re linking executive bonuses across all of Fortescue, and all of Fortescue Future Industries, to meeting our emissions reductions target,” Forrest told shareholders at the $60 billion capped miner’s AGM in Perth today in a speech that leant heavily on his recently amped up anti-fossil fuel rhetoric.
“We will not ignore the heating climate at the boardroom table, delivering against world-leading emissions targets, will form a critical element of our incentive structures for executives.”
It’s not unheard of in recent times. Mid-tier WA gold developer Bellevue Gold (ASX:BGL) announced an executive incentive scheme linked to its plans to produce gold at one of the lowest carbon intensities in the industry last year, with plans to be carbon neutral by 2026.
Forrest called on other remuneration committees and boards to link emissions to pay structures, saying executives that didn’t shift away from fossil fuels either had a vested interest or were ‘lazy’.
The exact details? They were a little lighter on, with Forrest giving up little more when asked for them in a brief press conference after the meeting.
What about the iron ore?
It does generate, at the moment, basically all of Fortescue’s revenue, but outside of references to FMG’s record 2022 the old iron ore operations got relatively short shrift.
There were some updates on the Belinga iron ore project in Gabon (drilling due early 2023) and the new Iron Bridge magnetite mine up in the Pilbara.
This bit is pretty nebulous as well, but Forrest also says FMG, drawing on its legacy as a one-time explorer, is out looking for ‘critical minerals’ as well.
“We’ve kicked off a global stream of work in South America, which secures the critical minerals, the global suite of projects, which we have across the world in renewables, hydrogen manufacturing, which will kickstart the green energy economy,” he said.
“That quieter, safer, peaceful, pollution free world I spoke of.
“We need it, the world needs it. Or we can forget it because we’ll be cooking ourselves. Fortunately the critical minerals we need in the terrestrial environment in the land environment, we don’t have to mine the sea, they are in abundance, we’ve just got to get out and look for them.
“I’ve just returned from seeing really large deposits of these critical minerals.”
How much they’ll cost is anyone’s guess.
Fortescue Metals Group (ASX:FMG) share price today:
Coal, lithium miners up on a smooth sailing Tuesday
Because if you were to go out and buy a critical minerals producer right now you’d be paying a pretty penny.
As BHP found with its $28.25, $9.6 billion cash bid for copper neighbour OZ Minerals (ASX:OZL) last week.
It would cost way more than that if someone were to have their eye on lithium mob Pilbara Minerals (ASX:PLS), Mineral Resources (ASX:MIN) or IGO (ASX:IGO) they’d be prohibitively expensive for most right now.
All three were among the top performing large caps today along with coal stocks led by 7.81% and 6.97% gains for Whitehaven (ASX:WHC) and Yancoal (ASX:YAL).
The materials sector closed the day up 1.15%, with energy up 2.64%.
