Fortescue confirms about 200 jobs have been cut in cost drive
Andrew ‘Twiggy’ Forrest’s Fortescue has cut about 200 jobs in a new cost drive as the miner juggles the development of iron ore and green energy projects.
Billionaire Andrew Forrest’s Fortescue Metals Group has cut up to 200 jobs as the resources giant juggles work on its mainstay iron ore projects and an emerging green hydrogen business.
A month after The Australian revealed Fortescue was preparing a major cost-cutting exercise, sources said up to 200 roles from its 15,000 strong workforce were slashed on Thursday and Friday.
Fortescue confirmed jobs had been lost, without confirming a figure.
“This is business as usual for rapidly evolving global companies. We are always looking for opportunities for continuous business improvement to maintain our industry leading cost position,” a Fortescue spokeswoman said.
“Right now we are growing globally and allocating resources swiftly to North America, responding to the Inflation Reduction Act. Projects such as Iron Bridge are coming into production phase soon, while our work in Gabon is just kicking off. As this occurs project staffing naturally ebbs and flows.”
It is understood Fortescue has been drafting the plans since late last year.
Rumours of substantial job cuts at its green arm - Fortescue Future Industries - have been circulating among staff since before Christmas, with some sources suggesting as many as 500 FFI staff could go as the green energy company shifts its focus away from its broad array of global options to those it believes it can deliver.
Dr Forrest flagged in November an acceleration of Fortescue’s spending at its Belinga iron ore project in Gabon, saying its 80 per cent owned subsidiary in the company was “closing in” on the grant of a preliminary mining licence in the country.
Fortescue first signed a deal granting the company access to the deposit in December 2021, and said in August would commit $90m over the next three years on exploration at the giant iron ore project, once owned by BHP.
FFI is also looking at stepping up its investments in the US, encouraged by the incentives of President Biden’s US Inflation Reduction Act for green energy projects.
The company recently told shareholders that FFI was looking at making decisions on a minimum of five new clean energy investment projects before the end of the year.
These are expected to include a green ammonia export project on Gibson Island in Queensland, a hydrogen project in Norway and another in the south west of the US.
The federal government last week promised to review its national hydrogen strategy in response to the competitive pressure of the US Inflation Reduction Act which provides billions of dollars of incentives for new clean energy projects in the US.
FFI was set up in 2018 as a subsidiary of Fortescue, to focus on clean energy projects, with a particular focus on green hydrogen.
Dr Forrest told shareholders in 2021 that FFI’s expansion would be funded by an annual injection equal to 10 per cent of Fortescue’s annual earnings.
The company told shareholders in February this year that FFI had a war chest of $US793m as a result of the funding from FMG.
But analysts have been critical of the lack of detail on how FFI’s investments might generate earnings for the company.