Fortescue’s Decarbonisation Drive Faces Market and Regulatory Crossroads

Financial and Operational Highlights

Fortescue Ltd has reported its financial results for the fiscal year ended 30 June 2025, delivering record iron ore shipments of 198.4 million tonnes, a 4% increase from the prior year. Despite a challenging iron ore price environment, the company posted a net profit after tax of US$3.37 billion, reflecting a 41% decline from FY24, primarily due to lower realised prices. Revenue declined 15% to US$15.54 billion, while the company maintained a strong balance sheet with cash on hand of US$4.33 billion and net debt of US$1.11 billion.

Operational excellence remained a cornerstone, with a hematite C1 cost of US$17.99 per wet metric tonne, marking the first annual cost reduction since FY20. Safety performance was industry-leading, with a Total Recordable Injury Frequency Rate (TRIFR) of 1.3, surpassing stretch targets.

Decarbonisation and Green Metal Progress

Fortescue advanced its ambitious decarbonisation strategy, commissioning a 100MW solar farm at North Star Junction, which now supplies approximately 25% of Iron Bridge’s electricity needs. The Pilbara Energy Connect transmission network expanded to 460km, supporting the integration of renewable energy across mining operations. The electric mining fleet grew with seven electric excavators and the commissioning of the first electric drill, alongside site-based testing of a prototype battery electric haul truck.

The Green Metal Project at Christmas Creek is progressing well, with construction underway and first production anticipated in FY26. This project aims to produce high-purity green iron using renewable energy and green hydrogen, positioning Fortescue at the forefront of low-emission ironmaking and supporting the long-term competitiveness of the Pilbara region.

Strategic Portfolio and Leadership Updates

In FY25, Fortescue refined its global energy project portfolio, discontinuing the Arizona Hydrogen Project in the US and the PEM50 Project in Australia, reflecting a disciplined capital allocation approach aligned with market conditions. The company also completed the acquisition of Red Hawk Mining Limited, adding flexibility to its mine plan through the Blacksmith Iron Ore Project.

Leadership changes included the appointment of Dino Otranto as CEO Metals and Operations with expanded responsibilities for electrification and hydrogen production, and Gus Pichot as CEO Growth and Energy, focusing on global green energy development. The Board welcomed new non-executive directors Noel Pearson, Noel Quinn, and Yasmin Broughton, enhancing its diversity and expertise.

Governance, Risk, and Sustainability

Fortescue continues to embed strong governance and risk management practices, with detailed disclosures on climate-related risks and opportunities. The company remains committed to its Real Zero Target, aiming to eliminate Scope 1 and 2 emissions from its Australian terrestrial iron ore operations by 2030 without reliance on offsets except where legally required.

Fortescue’s sustainability approach integrates community engagement, including significant contracts awarded to First Nations businesses and initiatives to improve workforce diversity and inclusion. The company’s climate transition plan aligns with international frameworks and includes scenario analysis to ensure resilience under various climate futures.

Dividend and Shareholder Returns

The Board declared a fully franked final dividend of A$0.60 per share, payable in September 2025, maintaining a payout ratio of 65% of net profit after tax, consistent with company policy. Fortescue’s dividend reflects its strong cash flow generation and commitment to returning value to shareholders.