Forrest flags lower returns for green projects as mining boss exits
Fortescue Metals executive chairman Andrew Forrest says he will accept the first generation of clean energy projects having lower rates of return than alternative growth options in the iron ore division, as mining boss Fiona Hick added to the extraordinary turnover of executives at the company.
Ms Hick and Dr Forrest agreed on her unexpected departure on Sunday after just six months in the job, and after both executives had spent the previous night at Fortescue’s 20th anniversary party at the Solomon mining hub in Western Australia’s Pilbara region.
Happier times: Andrew Forrest and Fortescue Metals chief executive Fiona Hick at the Iron Bridge magnetite project in the Pilbara. Peter Milne
Fortescue’s chief operating officer Dino Otranto was named as Ms Hick’s replacement on Monday and vowed his team would get behind the company’s “crazy vision” and would “nail it”.
No official reason was given for Ms Hick’s sudden departure, with sources suggesting she was frustrated at being blocked from making staffing and strategic changes while also holding concerns about the way Fortescue accounted for its twin divisions; mining and clean energy.
Fortescue has pledged to take a final investment decision on five clean energy projects before the end of December, and on Monday the company axed a 30-month-old policy that sought to limit spending within the clean energy division to 10 per cent of earnings generated by the iron ore division.
The axing of the policy came as spending on clean energy is expected to exceed 10 per cent of iron ore earnings this year, and Fortescue said the change was designed to ensure “all projects and investments will be assessed on their own merits consistent with Fortescue’s capital allocation framework”.
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