CEO interview: Inside Fortescue's transformation

Few would be surprised that three of the top eight companies on the ASX by market cap are iron ore companies. After all, Australia is the "lucky country". We’re blessed with enormous reserves of the raw materials the world needs, and iron ore is our most important export.

I think, however, many would be surprised to learn that the iron ore company which sits at number eight on the list, is increasingly leading a double life. The goal of Fortescue (ASX: FMG) is to be so much more than the typical ASX mining company, digging great big holes in the ground.

What it takes, it wants to give back. But the ultimate goal is to go even further.

Andrew Forrest's 2020 decision to transform Fortescue into a green energy and decarbonisation powerhouse is perhaps the most ambitious pivot of any major ASX company in the last 30 years. It’s also probably the riskiest.

But how do you tackle an issue so great from scratch? How much of the company's resources must you throw at it? How long will it take? And perhaps most importantly for shareholders, what is the financial return for the company’s investment?

In the following interview with CEO Dino Otranto, I ask all those questions and more, challenging him to explain exactly how Fortescue intends to balance its green ambitions against the weight of shareholder expectations.

Please note this video was filmed on 6 March, 2024

Time codes

• 0:00 - Intro
• 0:20 - First-half results overview
• 1:25 - Dino explains the aims of the new Energy/decarbonisation part of the business
• 2:50 - What is the significance of Fortescue's "Real Zero" target?
• 4:25 - What will be the impact on profits of the Energy/decarbonisation part of the business on profits in the short and long term?
• 5:40 - What is Fortescue's expertise in decarbonisation, does it have the expertise to achieve the company's goals?
• 8:05 - Would you ever consider breaking the business up into its two parts, Metals and Energy?
• 9:25 - How aligned are you to Mr. Forrest's vision, and how do you deal with disagreements within the company with respect to this vision?
• 11:20 - Livewire reader question 1, What is Fortescue's take on steel demand from decarbonisation industries?
• 13:10 - Livewire reader question 2, What is Fortescue's plan to develop demand for its products outside of China?
• 14:50 - Livewire reader question 3, Is Fortescue looking to grow its portfolio in the future minerals space, e.g. Lithium and Rare Earths?