Andrew Forrest takes back top job at Fortescue Metals Group
The founder and major shareholder will take back the reins at Fortescue as executive chairman for the first time since 2011 after an extensive global search.
Fortescue Metals Group chairman Andrew Forrest says the company’s board is still considering a shortlist for a permanent replacement for outgoing chief executive Elizabeth Gaines, despite his decision to step back into an executive role at the company.
Fortescue said on Wednesday Dr Forrest would take control of the company’s iron ore business for the first time since 2011, replacing outgoing chief executive Elizabeth Gaines, who announced her intention to retire as the Fortescue boss in December 2021.
Amid a swath of new high-profile appointments to its green energy arm, Fortescue Future Industries, Fortescue told the market it was planning a leadership restructure, appointing chief executives at both FFI and its iron ore division, which both reporting to the company’s board.
Dr Forrest will serve as its iron ore boss on an interim basis, the company said.
Ms Gaines will step down as chief executive in August and move to a non-executive role on Fortescue’s board, but it is not entirely clear whether Dr Forrest will become Fortescue’s executive chairman ahead of that date.
The Fortescue chairman told The Australian the company had allowed itself the “flexibility” for him to step into an executive role ahead of Ms Gaines’ departure as chief executive.
“What we’ve done with the strictures of governance is signal our intentions that the company is going through a period of time where it’s been presented with more challenges than any of us have ever seen on this board, in any company in history,” he said.
“And while it goes through that really wonderful but challenging period, I will step in as executive chair to really provide the best mentorship and support I possibly can to enormously talented executives.”
Dr Forrest said he would not take a salary for his time as Fortescue executive chairman, which the company described as an “interim” measure while it continued its search for a permanent chief executive to run its iron ore division.
From July Fortescue’s green energy arm, Fortescue Future Industries, will be run by former Europe President of General Electric Mark Hutchinson, with current FFI chief executive Julie Shuttleworth to take an as-yet undefined alternate senior role at Fortescue.
Former AGL boss Andrew Vesey will also join FFI as its head of energy transition projects.
Ms Gaines will remain on the Fortescue board, and will become FFI’s “global brand ambassador”.
FFI’s current Director of Projects Gordon Cowe, will become its Head of Projects Development, with Fortescue also recruiting McKinsey’s Christiaan Heyning as the company’s head of decarbonisation.
Fortescue is still hunting for a new head of its iron ore division.
The move gives effectively gives Dr Forrest total control of Fortescue, both as its biggest shareholder with more than 30 per cent of its stock, and as its most senior executive.
Both Dr Hutchinson and a yet-to-be appointed iron ore chief executive will eventually report directly to Dr Forrest.
Dr Forrest said in a statement the sweeping changes at the company he founded were aimed at locking in both Fortescue’s decarbonisation plans for its iron ore business and cementing its move towards becoming a global green energy giant.
“Today is a further progression of Fortescue’s transition to a global, green renewable and resources company,” he said.
“This growth and value to shareholders is already evident with our shareholder base doubling since FFI was launched, with our investors ranging from top tier institutional banks to grassroots investors, all wanting to be a part of this mission, as we continue to strongly outperform our peers in the iron ore sector.”
Dr Forrest has not held an executive role at Fortescue since he handed over the reins of the company to Nev Power in 2011
But he told The Australian he was “very comfortable” in returning to an executive role overseeing Fortescue’s iron ore operations.
“We already have fabulous people running iron ore. I don’t have to change a thing to establish fabulous leadership there, its already there,” he said.
Speaking at the Green Hydrogen Assembly conference in Barcelona on Wednesday night (AEST), Mr Forrest backed his predictions that FFIwould be able to meet its ambitious goals of producing 15 million tonnes of hydrogen a year from 2030, telling attendees that FFI would be producing green hydrogen for its customers within two to three years.
“If this needs to be a stock exchange release, then so be it – I’ll answer the question for all the good people in this great room. We know that we can provide the green hydrogen to our customers and they can make green steel, green iron. And we can start doing that inside the next two or three years,” he said.
And Mr Forrest revealed for the first time that Fortescue was considering developing a green hydrogen project in China, without giving details of the plan.
Asked by an interviewer when FFI’s earliest hydrogen project would be commissioned, Mr Forrest said the company would be in a position to deliver hydrogen to Germany’s E. ON within a few years, under a deal announced on March 29 that Dr Forrest said could be worth $50bn.
“We’ve agreed 5 million tonnes with E. ON, one of the biggest energy infrastructure companies in all of Europe, certainly the biggest in Germany – a former government owned utility, wonderful company with 50 to 53 million customers, particularly small and medium sized enterprises – and they need the first green hydrogen by 2024 to 2025,” he said.
“Now we have projects rapidly advancing in Australia, in Argentina, in North America, and in China with you. So we’re with you on that time frame, lets go the 2024/2025 fiscal year.”
Fortescue shares closed up 39c, or 2 per cent, on Wednesday at $19.78 — in line with gains across the broader materials index.