Fortescue to cast a wide net for CEO as Elizabeth Gaines steps down and Andrew Forrest says mining not the only focus

Fortescue Metals Group will look for a fresh leadership team from outside the mining industry as chairman Andrew Forrest looks to lock in his hydrogen dream.

Fortescue chief executive Elizabeth Gaines is to depart from the top job. Picture: Jane Dempster

Fortescue Metals Group will look for a fresh leadership team from outside the mining industry as chairman Andrew Forrest looks to lock in his hydrogen dream into the company’s future.

Fortescue said on Friday chief executive Elizabeth Gaines will step down as the boss of the iron ore major in 2022 as the company looks for a “deeper management bench” to pursue Dr Forrest’s vision of turning Fortescue into an “Aussie Aramco” – a global green energy powerhouse he believes will eventually challenge the $US7 trillion Saudi energy giant as the biggest energy supplier in the world.

Dr Forrest made the announcement in Sydney on Friday, saying Ms Gaines will assist with the search for a permanent new chief executive, and will remain a non-executive director of the company after she steps down as the company’s boss.

But the Fortescue founder made it clear that Fortescue Future Industries, the company’s green energy subsidiary, will be the focal point of decision-making over a new Fortescue boss, not its traditional iron ore business.

Fortescue said on Friday a new chief executive would likely come with manufacturing, heavy industry and renewable energy experience, and not necessarily from a mining background.

Dr Forrest said Fortescue’s next boss would be chosen on the basis of their ability to help transform the company from a pure-play iron ore producer into a diversified energy company and miner.

“People who have been already transformational in their careers, and in their companies, people who really understand the enormity of the challenge of green energy, green products, green electricity, heavy manufacturing,” he said.

“If they’ve got experience in mining, fantastic, but it’s not an absolute because that we can teach,” he said.

Ms Gaines did not have any significant background in the mining sector when she joined the Fortescue board in 2013, having previously held roles as the boss of travel company Helloworld, and Janet Holmes a Court’s Heytesbury.

She became the iron ore miner’s chief financial officer in 2017, and took on the company’s top job a year later when Nev Power stepped down as Fortescue’s chief executive.

Fortescue has climbed to record export levels and falling production costs under Ms Gaines leadership, and booked a record $10.3bn last financial year on the back of a soaring iron ore price.

She has also presided over an aggressive push by Fortescue to decarbonise its own operations, with the company this year committing to achieving net zero emissions by 2030 – well ahead of any of its corporate and mining rivals.

She steps down amid a massive push by Dr Forrest to diversify the company into renewable energy, after the Fortescue founder revealed a year ago he wanted to turn the company into the biggest energy company in the world.

Her resignation comes amid upheaval within Fortescue, with FFI adding up to 800 workers over the last year Fortescue looks to transform itself to become a major global energy and hydrogen player.

While the extraordinary scale of Fortescue’s push into renewable energy has attracted criticism from some institutional shareholders concerned it will detract from the company’s iron ore business – and despite an effective admission on Friday that she is not best placed to lead that transition – Ms Gaines told reporters she sees no conflict between the two.

“I don‘t really see the iron ore business and the renewable energy as being separate. They are completely intertwined. Because Fortescue won’t decarbonise unless Fortescue Future Industries is successful,” she said.

Dr Forrest described Ms Gaines decision to step aside and help with the search for a new leadership team as “selfless”.

“We had, I think, the best female leader in the world. But Elizabeth has chose to work with us and say ‘let’s create a bigger, deeper bench of leadership, and that can only happen if I step to the side and allow it to happen’,” he said.

Dr Forrest also used the announcement to reject suggestions there could be any move to spin out the company’s renewable energy arm, which is yet to generate any revenue but has reached dozens of agreements to examine the development of at least $US150bn worth of green energy and hydrogen projects across the world.

FFI has also announced technical breakthroughs in the development of hydrogen-fuelled trucks, as well as ship and locomotive engines powered by ammonia, and the potential production of “green iron”.

“It was never on the table. There‘s been a lot of speculation because we’ve had various valuations which are very, very serious,” he said.

“Why would you do that when you‘re creating a whole new trucking industry, because you’re the people that proved that you are out there in front, you’re not going to let that go. You are creating a whole new shipping industry … you’re creating a whole new train system, all of these zero pollution,” he said.

Ms Gaines told reporters on Friday she was “delighted” to be asked to remain on the company’s board.

She said it would be “business as usual” at Fortescue while a global search for a successor was underway.

Fortescue shares closed down 15c to $18.10 on Friday.

Fortescue Metals Group CEO Elizabeth Gaines at the company’s AGM in Perth. Picture: Colin Murty