Andrew Forrest to search far and wide for new Fortescue chief as Nev Power bows out

Twiggy Forrest says FMG’s next chief will be tasked with helming a new era of growth that may take the firm beyond mining.

Fortescue chief executive Nev Power at the Kings mine in the Pilbara.

Fortescue Metals chairman Andrew Forrest says his next chief executive will be charged with overseeing a new phase of growth at the nation’s third-biggest miner that could see it branch out of the mining industry, after respected managing director Nev Power today gave notice he would step down at the start of next year.

Mr Power will retire in February after a period in which he took the company Mr Forrest had set on track to be one of the world’s biggest iron ore miners and completed its growth program. Then, as markets turned for the worse, Mr Power put the company (FMG) on a stable footing with a strong balance sheet, low costs and reliable operations.

The lead internal candidate to replace Mr Power is seen as Fortescue’s operations director Greg Lilleyman, who joined the company in January after he left Rio Tinto’s executive committee. Finance director Elizabeth Gaines, a former Helloworld chief executive who was also appointed in January from the ranks of Fortescue’s independent directors, is also seen as a potential candidate.

But Mr Forrest says the company will also conduct an external search.

“Fortescue will be entering a period of growth, without using its balance sheet, taking large bets with its reputation and allowing other investors to come with us on that,” Mr Forrest declared today after announcing Mr Power’s coming retirement.

“Nev sees that as a new era of growth for the company, and if an optimal duration of a chief executive is five to eight years, then this is a great time (for a transition) and I applaud his judgment.”

Mr Power’s strong standing among investors was evident in the reaction of the share price after the announcement was made. At 3.40pm, the stock was down 23c, or 4 per cent, at $5.58, after trading at $5.69 just before the announcement.

Mr Forrest, who was Fortescue’s founding chief, paid tribute to Mr Power, who became Fortescue’s second chief executive in July 2011, after joining the company as chief operating officer six months earlier.

“He really has executed his duty to the highest degree and met or exceeded the often unreasonable standards set by his board,” Mr Forrest said.

“We could not be more pleased with his stewardship and respect his decision that it is time for the next chapter of Fortescue to begin.”

The chairman said he was sad to see Mr Power go but that he was excited about the next growth phase for Fortescue after Mr Power put it in the strong position it is in today.

Mr Power, a Queenslander who the chairman described as the hardest worker he had ever met, says he has not had more than three weeks off in one go since he left school at 15 to joint Mt Isa Mines.

“Personal sadness.” Fortescue founder Andrew Forrest

“When I joined Fortescue almost seven years ago I was absolutely enthralled by what the company had achieved in such a small space of time, and some seven years later I continue to be enthralled about what the Fortescue team are achieving,” Mr Power said.

“I’m looking forward to taking some time off and spending some time working on a few of my personal business interests including helping my son on the cattle station,” he said.

He said he was keen to continue an association with the company, either formally or informally.

On the new growth phase, Mr Forrest said opportunities would not be restricted to the mining sector.

“Fortescue’s reputation is, I think, without parallel in generating business opportunities and developing those opportunities … we intend to use that to continue to grow the company.” He said.

“I don’t see ourselves as only a mining company, I see ourselves as a great management and operating company and business-founding company, so if you were thinking along the lines of narrowing us to the mining sector, I wouldn’t do that,” he said when asked what areas he would look to grow in.

Mr Forrest said the prime criteria for Mr Power’s successor would be character.