Fortescue Group Limited Corporate Social Responsibility Report FY18 ABN 57002594872 Together we are Fortescue FY18 Report Responsibility Social Corporate

THE DREAM 2003 BEGINS 04 Cloudbreak identified 04

S&P/ASX 200 index 05 06 Port Hedland groundbreaking 06

07

08 FIRST ON SHIP 08

09 27mtpa shipped

10 Christmas Creek expanded 10 Inside 11 Solomon 11 construction begins 01 Overview 02 Operating and Financial Review 03 Approach to Corporate Social Responsibility 57.5mtpa shipped 12 04 Corporate Governance Firetail opened 05 Engaging with stakeholders 13 at Solomon 13 06 Setting high standards 80.9mtpa shipped 07 Creating positive social change 155MTPA SUSTAINABLE 14 PRODUCTION 08 Fortescue’s approach to climate change Kings Valley project 14 opened at Solomon 09 Safeguarding the environment • Anderson Point Berth 5 completion 10 Corporate Directory 15 • Fortescue River Gas Pipeline completion 15 • 500 millionth tonne of ore shipped • 165mtpa shipped sustainable production • US$2.9 billion debt repaid in FY16 • 169.4mt shipped in FY16 • Fortescue celebrates arrival of first ore carrier, 16 FMG Nicola into Port Hedland • Fortescue recognised as lowest cost supplier into China 17 • Achieved lowest ever TRIFR of 2.9 • 170.4mt shipped in FY17 FORTESCUE CELEBRATES: 18 • 1 billion tonnes of iron ore • 10 years since first ore 18 Core Leadership team appointed shipped to China • 15 years since the Company’s inception THE JOURNEY CONTINUES The year at a glance

VTECs anniversary Billion Opportunities Total taxes paid in FY18 Program milestone achieved th A$ A$ 10 2 bn 1. 2 bn

Stays in the Fortescue Active heritage places Recycled waste Family Room managed 971 5,597 86%

01 About this report

Integrity is a fundamental Fortescue Value and the Company works to maintain open and transparent relationships with its stakeholders.

This report outlines the performance of All references to Fortescue, the Group, Other than stated, no additional external Limited (Fortescue) the Company, refer to Fortescue Metals assurance has been sought regarding the against key material corporate social Group Limited (ABN 57 002 594 872) and its content of this report. responsibility issues and opportunities subsidiaries. All references to a year are This report was approved for publication during the financial year 1 July 2017 to 30 the financial year ended 30 June 2018 by Fortescue’s Board of Directors on 20 June 2018 (FY18). unless otherwise stated. Unless otherwise stated, this report refers to Fortescue’s August 2018. Fortescue is a signatory to the United operating sites. Nations Global Compact (UNGC) and this Feedback report represents the Company’s ongoing Greenhouse gas emissions, total energy Fortescue appreciates feedback on its commitment to report progress towards the consumption and total energy production reporting and communication with principles of the UNGC. The report has been were subject to independent assurance stakeholders. Please forward any comments prepared in accordance with the Global by auditors, PwC, in accordance with the or requests for additional information to Reporting Initiative (GRI) Standards Core National Greenhouse and Energy Reporting [email protected] option and a copy of the GRI Content Index (Audit) Determination 2009 and ASAE 3410: A survey requesting specific feedback on is provided on pages 90 to 96. The report Assurance Engagement on Greenhouse Gas this report is also available at also takes into account issues identified Statement, and the Australian Standard on through Fortescue’s Risk Management www.fmgl.com.au Assurance Engagement. Framework and guidance provided by key bodies including the International Council In addition, Fortescue undertakes a variety on and Metals (ICMM). of internal reviews and assessments of its emission and energy consumption data. A summary of Fortescue’s operations and Any such audits are reported to the Board’s financial statements for 1 July 2017 to 30 Audit and Risk Management Committee in June 2018 is reported separately in the FY18 accordance with the Corporate Governance Annual Report available at www.fmgl.com.au Statement FY18.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 01 Overview

03 01 | Overview

Chief Executive Officer’s message Elizabeth Gaines

Corporate Social Responsibility is our commitment to behave ethically, to create value for our stakeholders, to protect Aboriginal heritage and the environment, and to empower and partner with communities to build capability and capacity.

Building a strong business The long-term sustainability of our core We are committed to providing strong When Fortescue was founded 15 years ago, iron ore business in the remains a leadership and empowering all our team it was our vision that by first and foremost key priority for Fortescue. The Eliwana mine members to take the action required to creating a strong business, we could create and rail project is important to Fortescue ensure the safety of their workmates economic opportunities and contribute to and the state of Western , creating and themselves. thriving local communities. up to 1,900 jobs during construction, 500 Over the past five years, our TRIFR has full-time site positions once operational reduced by 38 per cent. Although we did Since the beginning, family has been at and the continued flow of benefits to our not achieve our stretch target of 2.6 in FY18, the heart of Fortescue’s culture; including communities and the economy. we continue to work towards our goal of respect for each other and for the broader becoming global leaders in safety. community, and we keep this at the core of Fortescue remains a signatory and is everything we do. committed to the initiatives and principles Creating opportunities for of the United Nations Global Compact. We are proud of our achievements and Aboriginal people We are also committed to contributing to At Fortescue, we are proud to be one of our ongoing contribution to Western the achievement of the United Nations Australia’s biggest employers of Aboriginal Australia (WA) and the country’s economic Sustainable Development Goals and use people. Our commitment to championing strength. Since Fortescue began, we have this report to demonstrate our contribution. generational change within Aboriginal paid corporate tax of more than A$3 billion, communities includes working with our royalties to the State of more than A$4.5 Safety of our people Traditional Custodian and Native Title groups billion and have invested over US$22 billion The health, safety and wellbeing of the to create economic opportunities through in Australia’s economy. Fortescue family is our number one priority the provision of training, employment and We currently employ more than 8,500 and our focus remains on ensuring our business development. people go home safely after every people, of which 50 per cent are direct Fortescue currently employs 810 Aboriginal single shift. employees. Of our direct employees, 70 people, representing 14.1 per cent of the per cent are based in WA and 20 per cent in total workforce. 16.7 per cent of employees regional WA. at our Pilbara sites are Aboriginal.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Invested over Fortescue’s Delivering over Apprenticeship Program US$ A$ 22 bn 98% 2 bn in contracts in Australia’s completion to Aboriginal economy rate businesses and joint ventures

This financial year we celebrated the At a personal level, I am focussed on We are also committed to working with tenth anniversary of graduations from leadership development, retention of our stakeholders to ensure communities Fortescue’s pioneering Vocational Training female talent and ensuring that women are understand and are prepared for the and Employment Centre (VTEC) Program. encouraged to progress to the C-Suite so potential future impacts of climate change. that we have equal representation in senior Since the initiative began 12 years ago, We understand that there is growing roles across corporate Australia. 797 Aboriginal people have commenced stakeholder interest in this issue and this employment with Fortescue through Training pathways year have commenced the process to the program. Training has always been at the heart of expand our disclosure in line with the Our Billion Opportunities Program also everything we do at Fortescue, whether that recommendations of the Task Force on Climate-related Financial Disclosures continues to provide support and assistance be through VTEC for Aboriginal Australians, (TCFD). Our climate change disclosure is to Aboriginal businesses. In January our award winning Fortescue Trade Up provided in this report on pages 75 to 80. 2018, the program reached a significant initiative or our Apprenticeship Program. milestone, recognising the award of A$2 Our apprenticeship success rate is Our people billion in contracts and subcontracts to 110 significant by comparison to anywhere 2018 was a special year for Fortescue as we Aboriginal businesses and joint ventures across Australia. Fortescue’s Apprenticeship celebrated 15 years of milestones. A decade since its commencement in 2011. We have Program has a 98 per cent completion rate, ago, Fortescue’s first 180,000 tonnes of iron backed this up with a finance facility for compared to the national average of 63 per ore left Herb Elliott Port, Australia bound for small businesses in partnership with ANZ and cent and 52 per cent in . Baosteel’s Majishan Port in China. In April, guaranteed by Fortescue. The $50 million We are particularly proud that 79 per cent of we celebrated our billionth tonne of ore shipped; taking less than 10 years to achieve funding scheme will ensure the long-term our apprentices are Aboriginal, compared to what others have taken decades to do. sustainability of these regional businesses. 3.5 per cent Australia wide. Commitment to diversity Fortescue has been on a remarkable Climate change trajectory and it is the sheer determination Diversity is important to Fortescue and there Climate change remains one of the most of the Fortescue family that has seen us is empirical evidence that proves diversity challenging issues facing the world and we become the true Australian success story drives financial performance. 24 per cent believe that businesses, government and the we are today. of our senior management team is female community must work together to address it. and we are proudly only one of two listed These achievements are a testament to companies in Australia with greater than 50 Fortescue is committed to contributing to the hard work and commitment of the per cent female Board members. global efforts to combat climate change. We entire Fortescue family and would also accept the scientific consensus as assessed not have been possible without our This year, we have continued to focus on by the Intergovernmental Panel on Climate suppliers, customers, Native Title Partners, providing practical measures to support Change and support the Paris Agreement pastoralists, government, local communities parents in the workplace including the 24 goal of limiting global temperature rise to and all our stakeholders who have joined us hour Fortescue Family Room and flexible less than 2oC. on this journey. working arrangements. We were pleased Our team works with a strong sense of to be recognised by the Bloomberg As a business we are working to ensure culture, values and community, and this is Gender-Equality Index (GEI) for our work in our resilience and make the most of our pathway to achieving Fortescue’s vision - supporting a gender diverse environment opportunities that may arise such as to be the safest, lowest cost, most profitable across the business. integration of renewable energy technology. mining company. 05 01 | Overview About Fortescue

Since it was founded in 2003, Fortescue A natural extension of Fortescue’s supply As the Company’s primary customers, steel has discovered and developed major iron chain, the fleet of eight Fortescue Ore mills in China trust Fortescue to deliver safe, ore deposits and constructed some of the Carriers were designed to complement reliable and consistent quality products. most significant mines in the world. The the industry best practice efficiency of The Company is committed to the strategic Fortescue team is focussed on achieving the Fortescue’s port. goals of ensuring balance sheet strength Company’s vision to be the safest, lowest The world leading Eliwana mine and and flexibility, investing in the core cost, most profitable mining company. rail project will build on Fortescue’s long-term sustainability of the business Now consistently producing 170 million development and construction capability, while pursuing growth options and tonnes of iron ore per annum, Fortescue utilising the latest technology, autonomous delivering returns to shareholders. has grown to be one of the largest, global trucks and design efficiency. Fortescue is focussed on ensuring iron ore producers and has been recognised Innovation in exploration, process and communities benefit from the growth and as the lowest cost seaborne provider of design is a key component of Fortescue’s development of its business. As a proud West iron ore into China based on Metalytics strategy to efficiently and effectively deliver Australian Company, Fortescue seeks to set Resources Sector Economics analysis. products from mine to market. high standards, create positive social change Fortescue’s head office is located in , and safeguard the environment and heritage Fortescue’s longstanding relationships with Western Australia. Fortescue owns and of the regions in which it operates. its customers have grown from the first operates integrated operations spanning commercial shipment of iron ore in 2008 A publicly listed company, Fortescue Metals three mine sites in the Pilbara, the fastest, to the Company becoming a major iron Group Limited shares are listed on the heavy haul railway in the world and the five ore supplier to China, and expanding into Australian Securities Exchange berth Herb Elliott Port in Port Hedland. Japan, South Korea and India. (ASX) ASX Code: FMG.

Fortescue celebrates 10 years of iron ore exports On 15 May 2018, Fortescue celebrated 10 “Fortescue has contributed to the “Ten years ago, I said Australia now had a years since the Company first produced and economic strength of our nation, providing new flagship Company and today Fortescue shipped ore to China, resulting in over one employment and training opportunities for continues to proudly wave that flag.” thousands of people including Indigenous billion tonnes of contribution to Australia’s Mr Forrest also acknowledged Fortescue’s workers, significant contracts that benefit economic growth. long-term relationship with its Chinese local communities as well as playing a key customers, who have played a critical role in A decade ago, Fortescue shipped its first role in the Australia-China relationship,” the the Company’s growth. 180,000 tonnes of iron ore aboard the Minister said. capesize vessel Heng Shan from Herb Elliott “We are proud of our contribution to China’s Founder and Chairman Port in Port Hedland. Since then, the Company remarkable economic development and AO, paid tribute to the hard work and has become the lowest cost and most efficient our role in supporting the important trade determination of the entire Fortescue family supplier of seaborne iron ore into China. relationship between China and Australia including suppliers, customers, government which has been vital to driving economic Speaking at the celebration event at pastoralists, Native Title Partners and local growth in both nations,” he said. Cloudbreak on 15 May 2018, Fortescue’s communities since the Company’s inception original mine site, Foreign Minister, Hon. in 2003. “There is an exciting future ahead. We Julie Bishop MP said Fortescue had changed look forward to continuing to invest in the “From the first discovery hole drilled at long-term sustainability of our core iron ore the face of the Pilbara and the Australian Cloudbreak to now sustaining consistent business in the Pilbara and ensuring that mining industry. production at 170 million tonnes per year, local communities continue to benefit from Fortescue is truly an Australian success our growth and development.” story,” he said.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Value Chain INNOVATION IN PROCESS AND DESIGN HAS BEEN A KEY COMPONENT OF FORTESCUE’S STRATEGY IN CHALLENGING INDUSTRY STANDARDS TO MORE 01 EFFICIENTLY AND EFFECTIVELY DELIVER ITS PRODUCT SUITE FROM MINE TO MARKET EXPLORATION AND DISCOVERY Challenging geological thinking to identify valuable deposits

02

EXTRACTION AND RECOVERY Innovative use of technology suitable to Fortescue’s deposits

03

PROCESSING Ore processing facility design and wet processing optimise output

04

MINE TO PORT Heavy haul rail at 42t axle load 05

BLENDING AND STOCKPILING Port design facilitates blending and stockpiling of product suite

06

SHIP LOADING 3 shiploaders and 5 berths maximise outload capacity and utilisation 07

MARKETING Helping customers achieve best value in use 08

SHIPPING Delivery to Fortescue’s international customers’ speci cations and 8 Fortescue Ore Carriers 09

DECOMMISSIONING Mine closure and rehabilitation 07 01 | Overview

The Fortescue has a talented and diverse Board committed to enhancing and protecting Board the interests of shareholders and other stakeholders and fulfilling a strong Overview governance role over the Company’s affairs.

The appointment and reappointment • Regular briefings from executive and embodies these values. There is a formal of directors is intended to maintain and senior management regarding all major process and policy to identify, disclose enhance the overall quality of the Board business areas, tailored site visits and and manage potential conflicts of interest, through a composition which reflects annual site tours to operations should they arise. a diversity of skills, experience, gender • Visits to meet with key customers that The Board and each of its three primary and age. The primary driver for the strengthen their understanding of the Committees have established a process to Board in seeking new directors is skills Company’s key markets evaluate their performance annually. The and experience which are relevant to • Regular formal and informal process is based on a formal questionnaire the needs of the Board in discharging opportunities for the directors to meet and interview conducted every second its responsibilities to shareholders. with management and staff. year by an independent consultant All new Board members benefit from The Board has established Committees to and every other year by the Company a comprehensive induction process assist in the execution of its duties and to Secretary under the direction of the Chair that supports their understanding of ensure that important and complex issues of the Remuneration and Nomination Fortescue’s business. are given appropriate consideration. The Committee. The most recent review Fortescue’s policy is to assess all potential primary Committees of the Board are the was undertaken in May/June 2018 by Board candidates without regard to race, Remuneration and Nomination Committee, the Company Secretary. The results and gender, age, physical ability, sexuality, the Audit and Risk Management Committee recommendations are reported to the nationality, religious beliefs, or any other and the Finance Committee. Each full Board for further consideration and factor not relevant to their competence and Committee has a non-executive Chair and agreement of improvement actions, performance. operates under its own Charter which has where required. been approved by the Board. There is also a range of support given to At the date of this report, the Board has Board members which enables them to stay Directors are expected to act eight non-executive directors and one strongly connected to the Company and independently, ethically and comply executive director, being Chief Executive its culture. with all relevant requirements of the Officer Elizabeth Gaines. The Board believes These include: Corporations Act 2001, ASX Listing Rules and that an appropriate mix of non-executive the Company’s constitution. The Company and executive directors is beneficial to its • Opportunities for significant contribution actively promotes ethical and responsible role and provides strong operational and to the annual strategy setting process decision making through its Values and financial insights to support the business. conducted with executive and senior Code of Conduct and Integrity that management

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Andrew Forrest AO Mark Barnaba AM Elizabeth Gaines Chairman Lead Independent Director/Deputy Chair Chief Executive Officer/Managing Director

Appointed Chairman in July 2003; Assumed Deputy Chair since November 2017; Lead Chief Executive Officer since February 2018 role of Chief Executive Officer in 2005; Independent Director since November and Executive Director since February Resumed non-executive responsibilities in 2014; Non-Executive Director since 2017; Former Non-Executive Director since July 2011. February 2010. February 2013. Mr Forrest is Fortescue’s Founder and A member of the Board of the Reserve Bank Elizabeth Gaines commenced as Chief Chairman and has led the Company to its of Australia, Mr Barnaba previously worked Executive Officer of Fortescue Metals Group status as the fourth-largest seaborne iron ore for McKinsey and Company and also held in February 2018. producer. Under Mr Forrest, Fortescue has several senior executive roles at Macquarie made significant investments in the Australian A highly experienced business leader with Group where he served as Chairman and resources sector of more than US$20 billion extensive international experience as a Global Head of Natural Resources for and become the lowest cost and most Chief Executive Officer and group executive, Macquarie Capital. efficient supplier of iron ore into China. Ms Gaines has a proven track record in Mr Barnaba is Chairman of The University financial and operational leadership across In 2001, Mr Forrest co-founded the Minderoo of Western Australia’s Business School a number of industries, including resources, Foundation with his wife Nicola, which has Board and an Adjunct Professor of Finance construction and infrastructure, financial supported over 250 initiatives across Australia and internationally in pursuit of a range of and Investment Banking at the University services and travel and hospitality. causes. Mr Forrest was appointed an Officer of Western Australia. He is co-founder of After joining Fortescue as a Non-Executive of the Order of Australia (AO) in 2017 for Azure Capital and has previously served Director in February 2013, Ms Gaines was distinguished service to the mining sector, to as the Chairman of Western Power, appointed Chief Financial Officer and the development of employment and business Edge Employment Solutions, the West Executive Director in February 2017. She is a opportunities, as a supporter of sustainable Coast Eagles Football Club and Alinta former Chief Executive Officer of Helloworld foreign investment, and to philanthropy. Infrastructure Holdings. Limited and Heytesbury Pty Limited and He is an Adjunct Professor of the Central After graduating from The University has also held the position of Chief Financial South University in China, a longstanding of Western Australia with a Bachelor of Officer at Stella Group and Entertainment Fellow of the Australian Institute of Mining Commerce, Mr Barnaba entered Harvard Rights Plc. and Metallurgy, and a leading global Business School receiving a Master of A member of Chartered Accountants representative of the resources sector. He is Business Administration. He received an Australia and New Zealand, the Australian co-Chairman of the Senior Business Leaders’ Honorary Doctor of Commerce from The Institute of Company Directors and Chief Forum, the leading formal dialogue for China University of Western Australia in 2012 and Executive Women, she holds a Bachelor of and Australia’s most senior business leaders. was granted the Honorary designation Commerce degree and Master of Applied In 2014, Mr Forrest was named Business Fellow of CPA from CPA Australia. He is Finance degree. Leader of the Year at the Australian Institute a Fellow of the Australian Institute of of Management Western Australia Pinnacle Company Directors. Former directorships in the last three years Awards and was awarded an honorary (ASX Listed Entities): NEXTDC Limited In 2015, Mr Barnaba was named a Member doctorate by The University of Western (Non-Executive Director); Mantra Group in the General Division of the Order of Australia for his service to the country. Limited (Non-Executive Director); Nine Australia (AM) for significant service to the Entertainment Co. Holdings Limited (Non- In 2017, he was named West Australian of the investment banking and financial sectors, Executive Director); lmpediMed Limited Year for his contribution to the community to business education, and to sporting and (Non-Executive Director); Helloworld and in 2018, he was honoured with the EY cultural organisations. Limited (Executive Director). Entrepreneur Of The Year Alumni Social Impact Award for the “lasting and exceptional Committee memberships: Audit and legacy” of his philanthropic work. Risk Management Committee (Chair); Remuneration and Nomination Committee memberships: Committee (Member) Finance Committee (Chair) 09 The Board

Sharon Warburton Lord Sebastian Coe CH,KBE Jennifer Morris OAM Deputy Chair Non-Executive Director Non-Executive Director

Deputy Chair since July 2017; Non-Executive Non-Executive Director since February 2018. Non-Executive Director since November 2016. Director since November 2013. Lord Coe is currently a senior advisor with Ms Morris is a former Partner in the Consulting Ms Warburton has extensive experience in Morgan Stanley & Co International plc and a Division of Deloitte, where she specialised in the mining, infrastructure and construction Non-Executive Director of the Vitality Group complex large-scale business transformation programs and strategy development. She sectors. She gained substantial operational, of health and life insurance companies. currently holds a senior position at the commercial and risk management In 2017, he became Chancellor of Minderoo Foundation as Chief Executive experience in the global resources sector Loughborough University having previously Officer of the Walk Free Foundation. through her time as an executive at Rio served as Pro Chancellor of the University. She has senior corporate governance Tinto. She has also previously held senior Based in the United Kingdom, Lord Coe experience and is currently a Commissioner is the Executive Chairman of CSM Sport executive positions at Brookfield Multiplex, of the Board of Australian Sports Commission. and Entertainment, within the Chime ALDAR Properties PJSC, Multiplex, A former Director of the Fremantle Football Communications group. He was elected and Citigroup. Club and Western Australian Institute of Sport, President of the International Association of In recognition of her experience, she was Ms Morris also served as Chairperson of the Athletics Federations (IAAF) in 2015 where awarded Western Australian Business Board of Healthway – the WA Government’s he is driving significant governance reforms peak health promotion body. Woman of the Year in 2014 and was a finalist through the organisation and its 214 A former member of the Australian Women’s in The Financial Review’s 100 Member Federations around the world. Women of Influence (2015). Hockey Team, Ms Morris won Olympic Lord Coe previously served as Chairman medals at the Atlanta 1996 and Sydney 2000 She is on the board of not-for-profit of the British Olympic Association and was Olympic Games. In 1997, she was awarded a organisation Perth Children’s Hospital Chairman of the Organising Committee Medal of the Order of Australia (OAM). Foundation and formerly the Chairman of for the London 2012 Olympic Games and Ms Morris is a Member of the Australian the Northern Australia Infrastructure Facility Paralympic Games. He was a member of the Institute of Company Directors, a Fellow and Director of Western Power. British athletics team at the 1980 and 1984 of Leadership WA, an affiliate member Ms Warburton is regarded as a financial, Olympic Games where he won two gold and of Chartered Accountants Australia and governance and remuneration expert and two silver medals, as well as breaking eleven New Zealand, and a member of the Vice is a Fellow of the Institute of Chartered world records. Chancellor’s List, Curtin University. Accountants Australia and New Zealand In 1992, Lord Coe became a Member of She holds a Bachelor of Arts (Psychology and and Australian Institute of Building. She Parliament and during his political career Journalism) received with Distinction and has is a Graduate of the Australian Institute served as a Government Whip and then completed Finance for Executives at INSEAD. of Company Directors, a member of Chief Private Secretary to William Hague, Leader Committee memberships: Remuneration Executive Women and a part-time member of the Opposition and Leader of the and Nomination Committee (Member); Audit of the Australian Takeovers Panel. Conservative Party. He was appointed to The and Risk Management Committee (Member) House of Lords in 2000. She holds a Bachelor of Business (Accounting and Business Law) from Curtin University. Other current directorships (ASX listed Nev Power entities): Gold Road Resources Limited Former Chief Executive Officer and Managing Director (Non-Executive Director); NEXTDC Limited (Non-Executive Director). Mr Power was appointed Chief Executive Officer in July 2011 and Managing Director in Former directorships in the last three years September 2011 and retired from Fortescue’s Board after resigning from his role as Chief (ASX Listed Entities): Wellard Limited. Executive Officer in February 2018. Committee memberships: Remuneration With more than 30 years’ experience in the mining, steel and construction industries, Mr and Nomination Committee (Chair); Power led Fortescue’s strong, values based culture and commitment to safety excellence. Audit and Risk Management Committee Prior to joining Fortescue, Mr Power held chief executive positions at Thiess and Smorgon (Member); Finance Committee (Member) Steel Group.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Dr Jean Baderschneider Penny Bingham-Hall Dr Cao Zhiqiang Non-Executive Director Non-Executive Director Non-Executive Director

Non-Executive Director since January 2015. Non-Executive Director since Non-Executive Director since January 2018 A highly regarded leader in both business November 2016. (nominated director from Hunan Valin Iron and Steel Group Company Ltd). and civil society, Dr Baderschneider brings 35 Ms Bingham-Hall brings significant years of extensive international experience operational skills and experience from Dr Cao is currently the Chairman of Hunan in procurement, strategic sourcing and executive roles including Head of Strategy at Valin Iron and Steel Group Company Ltd and supply chain management along with a deep Leighton Holdings (now CIMIC) – Australia’s brings extensive experience in technology understanding of high-risk operations and largest construction, contract mining, and steel mill management, along with a locations and complex partnerships. infrastructure and property development deep background in international co- Dr Baderschneider retired from ExxonMobil group – together with 20 years’ experience operation. in 2013 where she was Vice-President of as a company director. Dr Cao joined Valin Xiangtan Steel in Global Procurement. During her 30-year 1997 and has worked in a variety of career, she was responsible for operations Ms Bingham-Hall is a Fellow of the Australian roles including Director of the Research all over the world, including Africa, South Institute of Company Directors, a Senior and Development centre, before being America, the Middle East and Asia. Fellow of the Financial Securities Institute of Australasia and a member of Chief Executive appointed Chief Executive Officer. A past member of the Board of Directors Women and WomenCorporateDirectors of the Institute for Supply Management He holds a PhD in Science and is a senior Foundation. She holds a Bachelor of Arts and the Executive Board of the National engineer research fellow. (Industrial Design). Minority Supplier Development Council, Dr Baderschneider also served on the Other current directorships (ASX listed boards of The Center of Advanced entities): BlueScope Steel Limited (Non- Purchasing Studies and the Procurement Executive Director); Property Group Council of both The Conference Board and (Non-Executive Director). the Corporate Executive Board. In February Committee memberships: Finance 2011, she was the Presidential appointee to Committee (Member); Audit and Risk the US Department of Commerce’s National Management Committee (Member) Advisory Council of Minority Business Enterprises. She holds a Master’s Degree from the University of Michigan and a PhD from Cornell University.

Cameron Wilson Alison Terry Cao Huiquan Company Secretary Group Manager Corporate Affairs and Former Non-Executive Director Joint Company Secretary Mr Wilson was appointed Company Secretary Mr Cao was appointed Chief Executive in February 2018, bringing over 20 years mining Ms Terry joined Fortescue in 2014 as Group Officer of Hunan Valin Iron and Steel Group industry experience across the gold, nickel, Manager Corporate Affairs and serves as Joint Company Ltd in 2005 and concurrently held coal and mineral sands sectors. He started his Company Secretary, having been appointed to the position of General Manger of Lianyuan career as a lawyer in private practice with a the role in February 2017. Iron and Steel Group Co Ltd. leading Australian law firm and subsequently With significant experience in corporate held a number of senior legal, commercial and Mr Cao resigned from Fortescue’s Board affairs, legal, company secretarial and general governance positions, including most recently in January 2018. Dr Cao Zhiqiang was management, Ms Terry has previously held as General Counsel and Company Secretary at appointed to Fortescue’s Board, senior executive and Board roles across a Limited. replacing Mr Cao in January 2018. number of sectors including automotive, Mr Wilson holds a Bachelor of Laws from telecommunications and superannuation. the University of Western Australia and is Ms Terry holds a Bachelor of Economics and a Graduate of the Australian Institute of Bachelor of Laws (Honours) and a Graduate Company Directors. Diploma of Business (Accounting). 11 01 | Overview

Core Leadership team Elizabeth Gaines Chief Executive Officer

Ms Gaines commenced as Chief Executive Officer in February 2018. A highly experienced business leader with extensive international experience as a The Core Leadership Chief Executive Officer and group executive, Ms Gaines has a proven track record in financial and operational leadership across team was announced on a number of industries, including resources, construction and infrastructure, financial 30 November 2017 services and travel and hospitality. After joining Fortescue as a Non-Executive Director in February 2013, Ms Gaines was as part of a move from a traditional appointed Chief Financial Officer and Executive Director in February 2017. She is a leadership focus to a team with active former Chief Executive Officer of Helloworld Board support, devolving authority Limited and Heytesbury Pty Limited and has also held the position of Chief Financial throughout the organisation. Officer at Stella Group and Entertainment Rights Plc. A member of Chartered Accountants Australia and New Zealand, the Australian Institute of Company Directors and Chief Executive Women, Ms Gaines holds a Bachelor of Commerce degree and Master of Applied Finance degree.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Left to right: Ian Wells, Elizabeth Gaines, Julie Shuttleworth, Greg Lilleyman

Greg Lilleyman Julie Shuttleworth Ian Wells Chief Operating Officer Deputy Chief Executive Officer Chief Financial Officer

Mr Lilleyman commenced as Chief Ms Shuttleworth commenced as Deputy Mr Wells joined Fortescue in 2010 and has Operating Officer in February 2018, after Chief Executive Officer in January 2018, held multiple senior executive roles in the joining Fortescue as Director Operations in following four years as General Manager Finance team, including funding, treasury, January 2017. Cloudbreak and later General Manager planning and analysis as well as Company Solomon at Fortescue. She has over 23 Secretary. He commenced as Chief Financial With nearly three decades of extensive years’ experience in the mining industry in Officer in February 2018. international experience in the mining sector, Australia, China and Tanzania, including 19 Prior experience includes financing including over 20 years in the iron ore sector, years in gold/copper working for Newcrest Fortescue’s US$10 billion major iron ore across multiple commodities in large scope Mining, Sino Mining and Barrick Gold. project development to 155 million tonnes project development and construction, Ms Shuttleworth holds a double major in per annum, and successfully undertaking operational and business leadership, JV Extractive Metallurgy and Chemistry from multi-billion dollar capital raising and management and technology deployment, Murdoch University. She is a Fellow and refinancing transactions in domestic and Mr Lilleyman brings significant business Chartered Professional of the Australian international capital markets. credentials and iron ore market knowledge to Institute of Mining and Metallurgy, a Fortescue’s Core Leadership team. Most recently, he has held the position of Graduate Member of the Australian Group Manager Corporate Finance, leading Institute of Company Directors and is on Mr Lilleyman holds a degree in Construction Fortescue's capital management strategy with the International Committee of the Society Engineering from Curtin University and has group responsibility for Treasury and Funding. completed the Vincent Fairfax Fellowship of Mining Metallurgy & Exploration. She in Ethical Leadership at the University of has attended INSEAD and Harvard Business With more than 20 years’ experience as a Melbourne as well as the prestigious Wharton School, holds several Diplomas in Financial senior executive in leading ASX listed and Business School’s Advanced Management Markets and Management, and sponsors private companies in the mining, energy infrastructure and healthcare industries, Mr Program. He is a member of the Australian the Julie Shuttleworth Prize in Mineral Processing at Murdoch University. Wells’ prior positions include Chief Financial Institute of Mining and Metallurgy, the Officer of Singapore Power subsidiary Jemena Australian Institute of Company Directors Ms Shuttleworth has received numerous Limited and Acting CFO of Alinta Limited. and a Fellow of the Australian Institute of accolades including 2012 West Australian Management. Business Woman of the Year, she is listed in Mr Wells holds a Bachelor of Business in the 2013 WIM (UK) 100 Global Inspirational Accounting, is a Fellow of CPA Australia, a Women in Mining, and is one of the 2014 Certified Finance and Treasury Professional Australian Women of Influence. and a Graduate of the Australian Institute of Company Directors.

13 01 | Overview Executive team Fortescue’s Executive team is accountable for the safety of its people, upholding the Company’s Values, acting with integrity and honesty, and leading the business to achieve its vision of becoming the safest, lowest cost, most profitable mining company.

Danny Goeman Peter Huston Tim Langmead

David Liu Linda O’Farrell Alison Terry

Gerhard Veldsman Rob Watson

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Danny Goeman David Liu Gerhard Veldsman Director Sales and Marketing Senior Adviser to the CEO and COO Executive GM Pilbara Operations

Mr Goeman was appointed Director Sales and Mr Liu was appointed Director Sales and Mr Veldsman was appointed Executive Marketing in August 2018. Marketing in 2011. He has almost 30 years’ General Manager Pilbara Operations in February 2018. He started his career at Mr Goeman has more than 25 years of experience in trade and investment projects Fortescue in 2011 and has led the Port and experience in management, sales and between Australia and China and a strong marketing, strategy development and high understanding of Chinese culture and Rail operations and Solomon Hub. Most level commercial negotiations, including more business practices. recently, he was GM Iron Ore Projects, responsible for the Iron Bridge Joint Venture than 20 years with the group Mr Liu moved from Director Sales and of Companies. Magnetite Project and feasibility studies into Marketing into the role of Senior Adviser to the the Western Hub and Nyidinghu. Mr Goeman has a wealth of experience in Chief Executive Officer and Chief Operating leading commercial transactions in different Officer in August 2018. With more than 15 years’ industry geographies including Australia, Asia and experience spanning various commodities Europe, and has experience in a range of and operations in Australia and South commodities including diamonds, iron ore, Linda O’Farrell Africa, Mr Veldsman’s previous experience coal and potash. Group Manager Fortescue People includes senior operations management, asset reliability and overseeing mechanical, Mr Goeman has a Masters degree in Business Ms O’Farrell joined Fortescue in October 2013 structural and expansion projects. Administration. as Group Manager Fortescue People, joining the executive team in December 2014. Mr Veldsman holds a Bachelor of Peter Huston Engineering (Mech), Masters of Chief General Counsel and Director Having held a number of executive human Engineering (Mech), and is registered as a Corporate Services resources roles in major Australian resource Professional Engineer in South Africa. companies, Ms O’Farrell brings deep Mr Huston joined Fortescue as Chief General experience in strategic people management, Rob Watson Counsel in January 2005 and joined the diversity and Aboriginal employment. Group Manager Health and Safety executive team in January 2009 as Director Ms O’Farrell holds a Bachelor of Economics Corporate Services. Mr Watson was appointed Group Manager (Honours in Industrial Relations) from the Health and Safety in 2014 after joining Prior to joining Fortescue, Mr Huston spent University of Western Australia. 12 years as a partner of the law firm now Fortescue in 2011. Prior to this, Mr Watson known as Norton Rose and 10 years in spent 15 years in a number of senior private equity, mergers and acquisitions. Alison Terry corporate health and safety roles in large Group Manager Corporate Affairs and mining companies. Mr Huston holds a Bachelor of Laws Joint Company Secretary (Honours), Commerce and Jurisprudence Mr Watson’s career in health and safety and a Master of Laws. Ms Terry joined Fortescue in 2014 as Group spans over 25 years in a number of Manager Corporate Affairs and serves as industries and commodities. Mr Watson Joint Company Secretary, having been holds a Masters in Occupational Health

Tim Langmead appointed to the role in February 2017. and Safety. Director Community, Environment and Government With significant experience in corporate affairs, legal, company secretarial and Mr Langmead was appointed Director External general management, Ms Terry has Relations in January 2014, after joining previously held senior executive and Board Fortescue as Group Manager Corporate roles across a number of sectors including Affairs in January 2013 and was subsequently automotive, telecommunications and appointed Director Community, Environment superannuation. and Government. Ms Terry holds a Bachelor of Economics and Previously, Mr Langmead held senior Bachelor of Laws (Honours) and a Graduate corporate affairs roles in the Australian Diploma of Business (Accounting). business units of global oil and gas companies. Mr Langmead served in senior staff roles for Ministers in the Howard-Anderson and Howard-Vaile governments and commenced his career as an agribusiness journalist.

15 01 | Overview Fortescue’s Vision To be the safest, lowest cost, most profitable mining company.

Values

Safety Empowerment Family Frugality Stretch targets Look out for our mates Take action and Care for your Use your brain not Deliver against and ourselves encourage your team work mates your cheque book challenging targets

Courage and Integrity Enthusiasm determination Generating ideas Humility Do what you say Always be on the Show vulnerability Be positive, energetic Never, ever give up you’re going to do lookout for better ways in leadership

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 17 02 Operating and Financial Review

Overview

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Operating and financial highlights

Production C1 costs Cash on hand

US$ US$

170 mt 12.36/wmt 863m

Revenue Gross debt Net debt

US$ US$ US$ 6.9 bn 4.0 bn 3.1 bn

19 02 | Operating and Financial Review Overview of operations

Chichester Hub

The Chichester Hub in the Chichester The Christmas Creek and Cloudbreak teams Ranges, comprising the Cloudbreak are proud of their strong relationships with and Christmas Creek mines, has an the local Aboriginal people as Fortescue’s annual production capacity of 95 million Chichester operations covers Nyiyaparli, tonnes per annum (mtpa) from three Ore Palyku, Njamal and Martu Idja Banjima Processing Facilities (OPFs). Native Title groups.

Fortescue’s innovative Papa Waringka During the year, Fortescue converted (Nyiyaparli language for water in the Native Title Agreements with the Nyiyaparli ground) Managed Aquifer Recharge and Palyku people to Indigenous Land Use Christmas Creek Program at the Chichester Hub represents Agreements, further strengthening the one of the largest dewatering schemes Company’s long-term relationships with in the world and is fundamental to the the Traditional Custodians. Company’s commitment to protecting the Throughout the year, having successfully adjacent Fortescue Marsh. completed training at Fortescue’s VTEC in Port Hedland, 10 VTEC trainees began full-time employment at the Chichester Hub. Cloudbreak Solomon Hub The Solomon Hub in the Hamersley diesel consumption and drives sustainable Ranges is located 60 kilometres (km) north improvements in greenhouse gas emissions of Tom Price and 120km to the west of and energy intensity. Fortescue’s Chichester Hub. It comprises Operating on Yindjibarndi, Eastern Guruma, the Firetail and Kings Valley mines which together have production capacity of 75 Ngarluma/ Yindjibarndi and Kariyarra land, mtpa. Solomon is proud to provide training and employment opportunities for Aboriginal Fortescue is committed to maximising the people. In FY18, 12 VTEC graduates Pilbara’s rich endowment of natural gas to its from Fortescue’s VTEC training centre in advantage. The Fortescue River Gas Pipeline Roebourne started full-time work at the operating at Solomon reduces the mine’s Solomon Hub. Solomon

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Hedland Operations Eliwana Exploration Fortescue wholly owns and operates its During the year, Fortescue’s Board approved Fortescue has the largest tenement portfolio purpose built and designed rail and port the development of the Eliwana mine and in the Pilbara. Details of the Company’s facilities, constructed to deliver iron ore rail project. With an estimated capital cost Reserves and Resources are summarised from its mines to Port Hedland and on to of US$1.275bn, the development consists of in the Ore Reserves and Mineral Resources its customers. Covering 620km of track, the 143km of rail and a new 30mtpa dry OPF. Report on pages 35 to 42 of the FY18 Annual Report. Exploration activity in FY18 included railway is the fastest, heavy haul line in the This project is important to Fortescue and the discovery of several iron ore deposits world. The port has five operating berths the state of Western Australia, creating along the southern and western margins of and is capable of exporting more than up to 1,900 jobs during construction, 500 the Jeerinah Anticline in the western portion 170mtpa, making Fortescue’s port the most full-time site positions once operational of the Hamersley Group. efficient bulk port operation in Australia. and the continued flow of benefits to local Construction of Fortescue’s tug haven communities and the state economy. During the year, Fortescue continued to commenced during the year. undertake early stage, low cost exploration Iron Bridge on copper-gold prospective tenements in During FY18, a shelterbelt or ‘green Iron Bridge, located 100km south of and . windbreak’ was planted at Fortescue’s port. Port Hedland, is a joint venture between The 3,000 trees, purchased from the Pilbara’s Fortescue, Taiwan’s Formosa Group and only commercial native plant nursery, form China’s Baosteel Resources Ltd, a subsidiary Fortescue continued to assess exploration a 2.2 kilometre by six metre vegetation belt of China’s Baowu Group, incorporating the and development opportunities which will decrease wind speeds across world class North Star and Glacier Valley throughout South America including Fortescue’s operational sites, reducing Magnetite ore bodies. Feasibility studies Ecuador, Colombia and Argentina. As capacity for open areas to generate dust. for the high grade magnetite project Fortescue increases its presence and continue to be assessed with a decision, exploration activities in these countries, With its port operations built on Kariyarra in conjunction with Fortescue’s joint the Company is committed to providing land, Fortescue converted the Native Title venture partners, expected during the 2018 training and employment opportunities Agreement with the Kariyarra people to calendar year. for local, Indigenous communities. In an Indigenous Land Use Agreement in Ecuador, Fortescue has engaged with the FY18. Fortescue is a proud member of the community to create field assistant roles to Port Hedland community and supports a support exploration activities. residential workforce of 374 people.

Construction of Fortescue’s tug haven commenced during the year. 21 Empowerment is at the heart of Fortescue’s approach to Corporate Social Responsibility

Targets

Opportunities and Objectives

Fortescue’s Policies

Voluntary Commitments and Principles

Code of Conduct

Vision and Values

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 03 Approach to Corporate Social Responsibility

Creating shared value Corporate Social Responsibility (CSR) Compliance with all relevant legislation and is Fortescue’s commitment to behave obligations including those that govern ethically, to create value for the Company’s health, safety and environment is the stakeholders, to protect Aboriginal heritage absolute minimum standard to which the and the environment and to empower and Company adheres. partner with communities to build capability Fortescue’s Values form the foundation of and capacity. the Company’s approach to CSR, setting Fortescue is committed to ensuring the ethical and moral compass by which communities benefit from its growth business is undertaken. Fortescue’s Code and development and recognises that, of Conduct and Integrity establishes in order to achieve its vision of being the the essential standards of personal and safest, lowest cost, most profitable mining corporate conduct and behaviour of company, CSR must be embedded within all employees, suppliers and contractors. aspects of its business. This strong base supports the Company’s Empowerment is at the heart of Fortescue’s commitments and principles and leads to the approach to CSR – as is an absolute development and implementation of policies, determination to achieve practical outcomes. opportunities and objectives, ultimately informing the application of specific business It is demonstrated by Fortescue’s ability to unit targets, processes and plans. empower individuals within the Company and communities to be their best; to find innovative solutions to the most complex business and societal challenges and to find ways to improve the business’ bottom line while delivering positive change. 23 03 | Fortescue’s approach

Material issues Strategy: This report covers the material issues associated with Fortescue’s operations.

Fortescue's people Issues are considered material if they reflect the Company’s key environmental, social and deliver shared value by economic impacts or if they influence the assessments and decisions of stakeholders. maximising their energy CSR material issues are determined via an annual assessment process that considers and targeting their associated risks and opportunities and internal and external stakeholder views. resources. The assessment is undertaken through a cycle of identification, prioritisation, validation and review.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 During FY18, the assessment included Priorities were informed by internal and Based on this assessment, the following consideration of the following: external engagement which included were determined to be Fortescue’s most • Fortescue’s existing CSR initiatives focussed workshops with Fortescue’s material issues: • Material issues identified by peers and leaders and consultation sessions offered to • Employee health and safety sustainability leaders all employees. • Creating employment and business • Corporate risk assessments outcomes opportunities for Aboriginal people • Existing company policies, standards Materiality was validated by subject leaders • Ensuring ethical conduct and guidelines and the executive team. Specific formal • Eradicating slavery in the supply chain • Outcomes of internal and external feeback on material issues will be sought • Building local communities engagement from stakeholders during FY19. • Workforce diversity • Media and investor interest areas • Protecting biodiversity and water • Government/regulator interest resources and feedback. • Protecting Aboriginal culture and heritage • Climate change action and disclosure.

Fortescue’s performance against each material issue is reported against three core areas:

Setting Creating positive Safeguarding high standards social change the environment by championing safety, preserving by building local communities, by protecting biodiversity, Aboriginal heritage, embracing empowering Aboriginal people and managing water resources, reducing diversity and demonstrating integrity eradicating modern slavery greenhouse gas emissions and waste in Fortescue’s supply chain

25 03 | Fortescue’s approach

United Nations Sustainable Development Goals On 25 September 2015, the United Nations adopted the Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development. The goals are a call for global action to end poverty, protect the planet and ensure all people are able to enjoy peace and prosperity.

Fortescue is committed to contributing to the achievement of these goals. The table below demonstrates how the Company’s CSR targets, are working towards the SDGs. Material issues, related targets and link to SDGs

Target Performance Comments SDGs

Employee health, safety and wellbeing

Annually, achieve zero fatalities at Fortescue’s Zero fatalities in FY18 operations

By 2020, reduce injuries to lowest TRIFR and severity TRIFR – 3.7 quartile of resources industry

By the end of FY18, achieve top quartile Safety 94% of employees and contractors Excellence and Culture Survey results completed the survey

By the end of FY18, develop and implement a Business wide healthy lifestyle program - business-wide healthy lifestyle program Health inSite launched in February 2018

Annual decrease in positive alcohol and illicit drug Percentage of positive drug tests test results reduced by 28% in the last two years

Workforce diversity

By 2020, achieve an employment rate of 25% women Female employment rate of 17.4%

By 2020, achieve an employment rate of 30% women 24% of GM roles and above are female in manager and above roles 22% of manager roles are female

Annually, support community led programs Various programs supported including empowering women and ending discrimination Port Hedland Women’s Refuge and White Ribbon Day including Port Hedland’s White Ribbon Day march

Protecting Aboriginal heritage

Annually, ensure Fortescue has no impact on No reportable heritage incidents Aboriginal heritage without free, prior and informed in FY18 consultation with Aboriginal people

Ethical conduct, anti-bribery and corruption

Annually, ensure ethical conduct is maintained Leadership programs, training, by targeting leadership programs, training, performance assessments targets to performance assessments and remuneration ensure ethical conduct

Annually, meet and exceed global anti-bribery and No violations of anti-bribery and corruption standards including requirements in corruption laws respect to US Foreign Corrupt Practices Act (FCPA) and UK Anti-Bribery Act

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Target Performance Comments SDGs

Creating opportunities for Aboriginal people

By 2021, achieve a spend of 10% of total procurement 7.5% spend of total procurement with with Aboriginal businesses, with 50% of the number of Aboriginal businesses contracts awarded to businesses with more than 50% Aboriginal ownership

By 2020, achieve an employment rate of 20% for 14.1% of the workforce is Aboriginal Aboriginal people across the business

By 2020, achieve an employment rate of 10% for 7% of leadership positions held by Aboriginal people in leadership roles Aboriginal people

By 2022, achieve an employment rate of 20% for 15% of skilled trade positions held by Aboriginal people in skilled trades Aboriginal people

Annual involvement in the policy debate to address Ongoing contribution to policy debate Aboriginal disadvantage through engagement with peers, government and industry groups

Annually, deliver at least two major community Major community projects delivered projects with Indigenous Land Use Agreement partners including the Big hART and Jawun Programs

Building local communities

Annually, achieve at least 5% of actual spend with Spend of 7% achieved with local local Pilbara suppliers suppliers

By the end of FY18, update the approach to local Approach to local employment and employment and Fortescue’s residential workforce Fortescue’s residential workforce updated

By the end of FY18, review and update the Community Investment Strategy community investment strategy updated in FY18

Respecting human rights

Annually, source 100% of procurement through No suppliers were identified as having compliant suppliers a significant role in incidents of modern slavery

By the end of FY18, complete an audit of high risk No high risk suppliers onboarded in suppliers Australia

By mid FY19, complete a human rights assessment Human rights assessment completed across the business in FY18

Annual, active engagement on human rights issues Ongoing program. Engagement with in business peers, stakeholders and regulators

27 03 | Fortescue’s approach

Target Performance Comments SDGs Safeguarding the environment Achieve a net positive impact on biodiversity Ongoing program

Annual improvement in water use efficiency Efficiency improvement met

By the end of FY18, complete investigations into Alternative water disposal options alternative water disposal options investigated and assessed By FY21, complete and publish findings of a Pilbara- Data collection commenced in FY18 wide hydrogeological systems study By mid FY18, develop and communicate a whole of Business closure standard business closure standard communicated in FY18 By mid FY18, establish a Closure Steering Committee Closure Steering Committee to oversee closure planning and implementation established in FY18 By the end of FY18, develop a stakeholder Mine closure engagement engagement strategy on mine closure incorporated into Company stakeholder engagement strategy By mid FY18, develop a product lifecycle and waste Waste disposal procurement policy disposal procurement policy (excluding large mining developed in FY18 tyres known as OTRs) By the end of FY18, achieve >90% recycling rate for 86% of waste materials recycled total waste volumes By the end of FY20, identify a sustainable disposal Investigation ongoing method for OTRs and conveyor belt

Climate change and emissions reduction By FY20, achieve a 25% decrease in emissions 15% reduction in emissions intensity in intensity in electricity generation from FY15 levels electricity generation from FY15 levels By FY20, achieve a 5% decrease in emissions 3.7% reduction in emissions intensity in intensity in energy consumption in the production energy consumption in the production process from FY17 levels process from FY17 levels

Target met Target on track Target not met

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 04 Corporate governance

29 04 | Corporate Governance

Good governance is embedded throughout Fortescue and is the collective responsibility of the Board of Directors and all levels of management. Fortescue seeks to adopt leading practice, contemporary governance standards and apply these in a manner consistent with its culture and Values.

Fortescue supports the intent of the The cornerstone principles of corporate undertaken in a manner with corporate Australian Securities Exchange (ASX) governance at Fortescue are: expectations and standards. Corporate Governance Council Principles Transparency: Being clear and Corporate accountability: Ensuring that and Recommendations 3rd Edition unambiguous about the Company’s there is clarity of decision making within the (Principles and Recommendations) structure, operations and performance, both Company, with processes in place to ensure and meets the specific requirements of externally and internally, and maintaining a the right people have authorised approval the Principles and Recommendations, genuine dialogue with, and providing insight to make effective and efficient decisions, unless otherwise disclosed. Fortescue to stakeholders and the market generally. with appropriate consequences delivered is also monitoring the development of Integrity: Developing and maintaining for failures to follow those processes. the 4th Edition of the Principles and a corporate culture committed to ethical Recommendations and welcomes the Stewardship: Developing and maintaining behaviour and compliance with the law. enhanced focus on corporate culture in a Company-wide recognition that driving ethical and socially responsible Empowerment: Everyone at Fortescue is Fortescue is managed for the benefit of behaviour, as outlined in the Public empowered to make decisions that support its shareholders, taking into account the Consultation document, issued on the organisation’s objectives and are in the interests of other stakeholders. 2 May 2018 by the ASX Corporate best interests of stakeholders. Management A full copy of the Corporate Governance Governance Council. and staff are encouraged to be innovative Statement is available on the Company’s and strategic in making decisions that website at www.fmgl.com.au align with Fortescue’s risk appetite and are

STAKEHOLDERS

GOVERNMENT BUSINESS AND PARTNERS AND SHAREHOLDERS EMPLOYEES COMMUNITY REGULATORS INVESTORS

BOARD

MANAGEMENT RESPONSIBILITY

Audit and Risk Remuneration and Finance Management Committee Nomination Committee Committee

BUSINESS PROCESS INDEPENDENT ASSURANCE ACTIVITY DELEGATION OF AUTHORITY

CHIEF EXECUTIVE OFFICER

CORE LEADERSHIP TEAM

POLICIES AND PROCEDURES EXECUTIVE AND LINE MANAGEMENT

INTEGRATED RISK MANAGEMENT

CORPORATE CULTURE AND VALUES

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 05 Engaging with stakeholders

Working together

31 05 | Engaging with stakeholders Overview

Meaningful stakeholder engagement is Fortescue has ongoing interactions with a Feedback mechanisms and a monitoring at the heart of Fortescue’s approach to large number of stakeholders and identifies and evaluation process are adopted to building trust and understanding within stakeholders based on the level of interest, ensure continual improvement. A summary the communities in which it operates. potential impacts and opportunities related of the interests of key stakeholders, and the to its activities, prioritising those who may engagement and responses provided in The Company’s Stakeholder Engagement be directly impacted. FY18 is detailed on the following pages. Framework encourages open, transparent, continuous and inclusive communication, The Company works to ensure the allowing new relationships to be developed resolution of grievances in a transparent and existing ones to grow. and accountable manner via the formal process outlined in the External Stakeholder Grievance Procedure.

Employees

Interests Engagement/response

• Ensuring a safe workplace • Regular, open, internal communication events including whole-of- • Fostering a rewarding work environment, where team weekly meetings and senior leader forums with the CEO and employees feel empowered through career development Core Leadership team and promotional opportunities • Leadership Excellence Pathway to provide professional development • Building a strong and unique culture through a for employees Values-driven approach • Annual Safety Excellence and Culture Survey and regular engagement • Building and maintaining diversity and committing to on safety performance and improvement preventing discrimination of any form • Formal employee recognition programs, such as Northern Spirits • Flexible working arrangements for exceptional performance, and Legends events for employment milestones • Internal communication channels including pre-start meetings, internal social media platform; Workplace, Company-wide emails, site notices, intranet, internal newsletter, Fortescue TV screens, live-streamed Workplace meetings and events • Ongoing implementation of Fortescue’s FY18 Diversity Plan • Celebrating Fortescue’s 15 years of milestones through live streaming the One Billionth Tonne celebrations, 10 years since first ore was shipped event and the Company’s 15th birthday

Customers

Interests Engagement/response

• Safe, reliable and consistent supply and delivery of • Regular engagement, including face to face and electronic blended iron ore products communication • Maintenance of strong technical and commercial • In-country presence through offices in Shanghai and Singapore relationships through timely, open and honest • Highly skilled and experienced marketing and sales team communication • Quality control of product • Implementation of targeted, continuous improvement programs • Visits to customer operations • Customer visit to Fortescue’s Cloudbreak operations in May 2018

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Shareholders and Investors

Interests Engagement/response

• Delivery of strong shareholder returns • Regular briefings including quarterly, half year and full year results • Management of risk • Regular meetings and briefings of financiers and investors including • Delivery of cashflows to maintain a strong balance sheet site visits • Strong governance • Email alert systems that allow interested parties to register for automatic ASX lodgement notifications • Participation in investor/advisor sustainability assessments including the 2017 Dow Jones Sustainability Index Assessment • Annual General Meeting

Local communities

Interests Engagement/response

• Sustainable growth and development for communities • Community development plans through local training, employment and business • Dedicated community office and community engagement team opportunities, education and other services • Meaningful community consultation and engagement • Development of a diversified local economy - interface • Fortescue-hosted community events with mining, agriculture and tourism industries • Fortescue community support program • Potential environmental, economic and social impacts • Partnerships and investments in significant projects associated with Fortescue’s operations • Fortescue’s Vocational Training and Employment Centre (VTEC) • Culture and heritage management • Dedicated heritage, pastoralist and Aboriginal development teams • Implementation of Fortescue’s Stakeholder Engagement Framework • Local procurement targets and strategy • Targeted proposal presentations

Native Title Partners

Interests Engagement/response

• Native Title rights and interests • Dedicated Aboriginal heritage, Native Title and Aboriginal development • Compliance with Land Access Agreements (LAAs) and teams Indigenous Land Use Agreements (ILUAs) • Progressive negotiated review of LAAs and registration of ILUAs • Strengthening cultural awareness and understanding • Regular communication and consultation with Native Title groups and • Opportunities through training, employment, and prescribed working group committees business development • Support for Aboriginal heritage protection and promotion activities • Potential environmental and social impacts of operations • Continued growth of the Billion Opportunities Program • Fortescue’s Vocational Training and Employment Centre (VTEC) • Targeted and tailored business development meetings • Fortescue hosted business and employment exhibitions and events • Local content procurement targets and strategy • Dedicated community office and community engagement team • Development and implementation of multiple programs for education and professional development such as high school scholarships, cadetships, school and work based traineeships and University Graduate Program • Continued participation in national policy debates

33 05 | Engaging with stakeholders

Suppliers and contractors

Interests Engagement/response

• Ensuring economic opportunity through sustainable • Regular meetings, communication and reviews with strategic suppliers business development and contractors • Working together to achieve mutually beneficial • Strategic relationships and partnerships developed with contractors outcomes and suppliers • Transparent communication through procurement • Continued growth of the Billion Opportunities Program processes • Local content procurement targets and strategy • Strong policy framework • Early engagement with key contractors and suppliers for major projects • Practical solutions to support Aboriginal and local businesses such as 14 day payment terms and ANZ Leasing Facility

Government and regulators

Interests Engagement/response

• Job creation, economic activity and local content • Regular, ongoing engagement with Government and regulators at • Social and environmental impacts, management and Federal, State and Local levels biodiversity offsets • Public information including financial results and development of • Environmental, social and fiscal performance and community reports compliance • Signatory to the Tax Transparency Code of Australia 2016 • Legislative and regulatory policy frameworks • Detailed annual compliance reporting • Land access and approvals • Contributing to government/regulator policy development including • Community development on modern slavery • Royalty payments • Providing site visit opportunities • Tax transparency

Pastoralists

Interests Engagement/response

• Protection and maintenance of productivity levels • Dedicated pastoral access team • Preservation of groundwater reserves • Formal agreements • Safeguarding of grazing areas • On ground mitigation of impacts • Ongoing, informal and formal consultation with individual pastoralists • Minimise and offset impacts on pastoral operations

Educational institutions

Interests Engagement/response • • Providing access to career pathways and opportunities • Development and implementation of multiple programs including high • Supporting Aboriginal students and creating economic school scholarships, cadetships and school and work based traineeships, opportunity through education and training Fortescue’s Trade Up and University Graduate Program • Attracting high calibre employees by positioning the • Involvement in local career expos such as AMMA Resources Connect Company as an employer of choice • Site visits and work placement opportunities • Operational funding for Hedland Senior High School Trade Training Centre • Engagement with universities across Australia to encourage graduates to join the Fortescue family • Australia China University partnership

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Non-government organisations

Interests Engagement/response

• Social and environmental impacts and their • Involvement in UNGC and other industry forums management • Continued inclusive engagement and consultation • Environmental performance • Partnerships in delivery of services and supporting programs • Community engagement • Development of corporate policies • Human rights performance • Reporting, ASX announcements and media releases • External Stakeholder Grievance Procedure • Maintenance of strong environment and community teams

General community

Interests Engagement/response

• Social and environmental impacts and their management • Regular communication and consultation including specific forums on • Community engagement social and environmental impact mitigation and management for new • Environmental performance developments • Human rights performance • Targeted and tailored business development meetings • Employment and business opportunities • Fortescue hosted business and employment exhibitions and events • Community support • Local content procurement targets • Dedicated community office and community engagement team • External Stakeholder Grievance Procedure • Continued support for community programs and events

35 06 Setting high standards

Championing safety, embracing diversity and demonstrating integrity

Significant Incident Total Recordable Injury Frequency Rate (SIFR) Frequency Rate (TRIFR) Severity Rate per million hours

5.1 4.3 2.9 3.7 229 155 94 128 4.3 3.3

FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY17 FY18

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Employee health, The mining industry still has one of the The Company implements a program of highest fatality rates of any industry. education, coaching, training, monitoring safety and wellbeing Fortescue acknowledges its activities have and reporting, to encourage continuous Objective the potential to expose its employees, improvement and is actively engaged at To be global leaders in safety across all contractors and communities to health and both a local and global level. operations. safety risks and works diligently to identify The prevention of high-risk events is these risks and ensure adequate controls are managed through the implementation of a Target in place to mitigate them. critical control monitoring program, where • Annually, achieve zero fatalities at critical control audits are conducted by Fortescue’s operations Safety is Fortescue’s number one priority leadership teams, made up of leaders from • By 2020, reduce Total Recordable Injury and the Company focusses on building sites, to ensure these controls are in place Frequency Rate (TRIFR) and severity safety leadership and a culture that and effective. to the lowest quartile of the resources empowers each person to look out for their Fortescue’s Board of Directors is responsible industry. mates. Every team member working on for overseeing the management of safety Fortescue sites is encouraged to pause and and occupational health, while the Core take the time to assess a task to ensure it is Leadership team has overall responsibility to safe before proceeding. ensure health and safety in the workplace.

Case Study Health and Safety Program

Fortescue has implemented a tiered Health and Safety Program to ensure a consistent approach to safety management across the business. The program includes:

• Health and Safety Management Standards • Life Saving Choices An overarching framework which includes all of the controls 12 simple rules which empower all employees and contractors required to achieve safe outcomes to manage the fatality risks where they have direct control and influence of the job • Major Hazard Control Standards 65 common and 14 site-specific critical controls, which are • Mental health and wellbeing blueprint continuously monitored across all areas of the business Outlines Fortescue’s approach to ensuring the health and by leaders to ensure fatality and serious injury risks are wellbeing of the workforce is effectively managed. eliminated

Fortescue strives to be a global leader in By having a focussed effort on proactive health and safety. There were no workplace injury management, Fortescue’s injury fatalities or prosecutions in FY18 for severity rate per million hours worked has workplace safety breaches. reduced by 22 per cent over the past two years and increased over the last year. During FY18, the Significant Incident Frequency Rate (SIFR) per million hours Fortescue’s reporting is aligned with the Zero reduced from 4.3 in FY17 to 3.3, totalling a 23 United States Government Occupational per cent reduction. A Company-wide focus Safety and Health Administration (OSHA) workplace fatalities on improving safety has seen Fortescue’s guidelines for the recording and reporting since FY14 TRIFR reduce by 38 per cent over the past five of occupational injuries and illnesses. The years, including a reduction of 14 per cent in rates provided include all employees and the past two years despite an increase in the contractors working on a Fortescue site last year. and are based on one million hours. The severity rates include days lost and days restricted from work and are also based on one million hours. 37 06 | Setting high standards Safety culture Fortescue conducted an independent The survey was completed by 94 per cent Safety Excellence and Culture Survey of its of eligible participants, compared to 92 per Objective employees and contractors in May 2018. cent in FY17. This represents almost To continuously improve and develop a This annual survey is a valuable tool to 6,700 responses. leading safety culture that works towards engage with employees and contractors and The improvement in culture of the an organisational wide value for safety, that identify further opportunities to improve the workforce from FY16 to FY18 is is led by leadership teams and to create Company’s unique safety culture. illustrated below: an organisation that actively cares for all employees and contractors.

Target By the end of FY18, achieve top quartile Safety Excellence and Culture Survey results.

Safety Excellence and Culture Survey results FY16 to FY18

100 FY16 FY17 FY18 90 80 70 60 50 Percentiles 40 30 20 10

Injury Others Justice Upward Relations Exchange Perceived Reporting Teamwork Credibility Procedural Procedural Work Group Work Approaching Management Organisational Leader Member Leader Value for Safety for Value Communication Organisational SupportOrganisational

Case Study Controlling Energies Program

During FY18, a Controlling Energies Program was developed in an engaging workshop, with feedback noting a refreshed and implemented across all mobile maintenance teams within focus and greater understanding of potential hazardous energy Fortescue. The objective of this program was to ensure that mobile sources with the information easily accessible, via simple matrixes. maintenance trades personnel were competent in controlling all The result of this program is a safety package that is designed energy sources whilst maintaining surface mobile equipment. especially for upskilling and keeping mobile maintenance workers in control of potentially damaging energies. The program content was developed by mobile maintenance trades personnel by focussing on specific machine types and An example of one of the energies required to be controlled for outlined how to effectively control energy sources which have excavators involves the hydraulic energy stored in the boom stick the potential to be fatal or cause serious injury or harm. prior to commencing maintenance activities.

The program was owned and implemented by the operational The program is currently also being adopted by contractor mobile maintenance teams and was delivered by the leaders partners within Fortescue’s operations.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Promoting healthy lifestyles To support its employees Objective on the journey to better To promote the value of a healthy lifestyle to Fortescue employees and contractors, emphasising mental and physical wellbeing. health, Fortescue Target introduced Health inSite. By the end of FY18, develop and implement a business-wide healthy lifestyle program.

Case Study Health inSite

A healthy body and mind helps individuals succeed at both Also available on mobile devices, the online resource allows home and work and contributes to stronger relationships staff to access: with those around us. • Individual health recommendations To support its employees on the journey to better health, • Nutrition and fitness advice Fortescue introduced Health inSite in February 2018, an online • Recipes health and wellbeing resource that provides individuals with • Health and wellbeing articles. tailored information and advice based on their health profile.

Alcohol and other Fortescue’s alcohol and other drugs (AOD) program reinforces the importance of drugs maintaining a zero tolerance of alcohol and Objective drugs while working. To address the prevention of substance In FY18, Fortescue conducted over 20,000 abuse, including the harmful use of alcohol drug tests across sites through random, 18% and illicit drugs. blanket or ‘for cause’ programs. reduction in positive Target The percentage of positive drug tests drug tests since FY16 Annual decrease in positive alcohol and reduced by 18 per cent in the last two illicit drug tests. years. This reduction can be attributed to a range of initiatives including online awareness and education training, the ‘Speak Up’ program and the continued support provided to employees by leadership, the Fortescue Chaplains and the Employee Assistance Program.

39 06 | Setting high standards Fortescue would not be where it is today without the hard work and dedication of its people.

A$ A$ 5,751 71m 694 m Direct employees Total Total salaries superannuation

Fortescue family discrimination including against age, race, Fortescue is a gender, political or religious belief, culture, Fortescue would not be where it is today family commitments, physical or mental values-based business without the hard work and dedication of ability, marital status or sexual orientation. with a unique and strong its people. As at 30 June 2018, Fortescue employed culture that is maintained The Company strives to be an employer of choice and implements programs and 5,751 employees. Of these, 347 were and strengthened incentives to attract, develop, challenge and permanent part-time employees and 1,226 through its leaders and retain its people. people worked under labour hire contracts. 52 per cent of Fortescue’s employees were every employee. Fortescue respects freedom of association, covered by enterprise agreements and the right to a fair wage and ensures all the annualised voluntary turnover is employees are treated fairly and without 10.5 per cent.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Case Study Values Forums 2018

Safety and family shine through

In May 2018, Fortescue’s Core Leadership team (CLT) held a series “Particular emphasis was placed on safety and the importance of of interactive Values Forums in Perth, Solomon Hub, Cloudbreak, family which we will continue to focus on throughout all facets of Christmas Creek and Hedland Operations. our operations,” she said.

More than 400 people attended the forums where they were Employee engagement is a key priority for Fortescue and the given a business update by the CLT and then led discussions on Company is committed to ensuring its employees are provided Fortescue’s Values. with opportunities to help shape the way it conducts business.

CEO Elizabeth Gaines, said she was pleased to see the number of As a result of the Values Forums, a Values campaign is underway participants at the Forums and was buoyed by their enthusiasm to reinforce all 10 Fortescue Values by using examples across to have their say on the Values which underpin the business. the workplace.

Supporting leaders Recognising the Fortescue team Employee support Fortescue places great importance on Fortescue’s employee recognition program, Fortescue’s Chaplaincy is a dedicated personal leadership development and Northern Spirits, celebrates and rewards pastoral care service available to all implements a number of programs and Fortescue team members who strengthen employees, contractors and their families. initiatives to support its leaders through the the Company’s culture. The vision of Fortescue’s Chaplaincy Leadership Excellence Pathway. The pathway The awards recognise the contribution of team is to be proactive in offering pastoral includes a two-day Emerging Leaders members against one of the six categories: care in a welcoming and wholesome Program, four-day Leadership Fundamentals work environment. The Chaplaincy also 1. Keeping our mates and ourselves safe Program, two-day Advanced Leadership provides support to families at home when 2. Building great team culture Program and short and targeted Leadership 3. Inspiring female employees to thrive employees are on sites. Development Programs on sites, focussing 4. Having a crack at the bottom line on specific leadership aspects. 5. Closing the gap by supporting In FY18, 1,084 current and emerging Aboriginal achievement leaders completed formal leadership 6. Going the extra mile for our community. training in 91 courses. Since its inception in 2015, 4,551 leaders have completed this development program.

For the last five years, Fortescue has also provided career resiliency training to support high performing female employees to develop their careers and achieve their potential. In FY18, this commitment was extended to include a pilot program for males and females at its Solomon Hub. Over the course of the year, 40 females and eight males attended the course.

Company Chaplain David Bradbury, providing support. 41 06 | Setting high standards

Case Study New career opportunities

Fortescue’s innovation projects, including the Autonomous Haulage System (AHS) rollout and the Cloudbreak relocatable conveyor trial, provided the Company’s mining operators with the opportunity to explore a career in a different area of the business.

Many of these employees started their journey with Fortescue Employees also spent time with their leaders to discuss career through VTEC. goals and Career Centres were established to provide ongoing advice and support. During the year, a series of career nights were held for employees to find out more about other roles that interested them. These Career opportunities were also provided through training events were attended by more than 400 people. programs, internal promotions and transfers and flexible work arrangements, including job share. 108 employees have started new roles across the business through this successful initiative.

Case Study New opportunities for apprentices

28 apprentices from Fortescue’s Apprenticeship Program “The inclusion in our apprenticeship of six-monthly rotations successfully gained permanent employment during FY18, across different sites, as well as a three-month external representing Fortescue’s largest cohort of apprentices to secondment, means you become a well-rounded tradesperson graduate to date. through exposure to all aspects of trades,” Thomas said.

The Apprenticeship Program has been running for over seven Fortescue’s Apprenticeship Program has a 98 per cent years and covers a range of trades to support the business, completion rate, compared to the national average of 63 per cent including electricians, heavy vehicle mechanics, fixed plant and 52 per cent in Western Australia. mechanics, fabricators and light vehicle mechanics. The Company is particularly proud that 79 per cent of It complements other initiatives already in place, including its apprentices are Aboriginal, compared to 3.5 per cent Fortescue’s Trade Up Program and Vocational Training and Australia-wide. Employment Centres, which are providing sustainable career development prospects for Aboriginal and female team members.

Graduate Thomas Thyne, who commenced employment at Cloudbreak as a heavy mobile mechanic, said the program of all Fortescue’s has allowed him to complete his apprenticeship and also gain apprentices confidence working as part of a large team. 79% are Aboriginal.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Fortescue celebrates and respects its people’s differences and is committed to being inclusive at all times.

The Company strives to create a welcoming and encouraging environment which directly enhances Company success by improving diversity.

Workplace diversity Objective Objective Increase the number of female employees Support the empowerment of women and and leaders, to build a more inclusive end discrimination in local communities. culture.

Target Target • By 2020, achieve an employment rate of Annually, support community led 25 per cent women programs empowering women and ending • By 2020, achieve an employment rate discrimination. of 30 per cent women in manager and above roles.

43 06 | Setting high standards

Case Study CEO Elizabeth Gaines’ thoughts on diversity in the workplace

I spent a number of my early school years in the Kimberley where • Supporting parents the benefits of diversity were made clear to me from a very early Family is one of Fortescue’s core Values and along with safety age. I found myself in classrooms full of children from all walks resonates very strongly across our workforce. of life, who brought a whole range of different experiences and Introducing a family-friendly workplace which supports perspectives. parents is key to encouraging diversity and inclusiveness. For Through that lens and from my experiences throughout my life example, the Fortescue Family Room in Perth provides parents and career, I have seen first-hand that encouraging diversity is not with alternative child-minding services and is available 24 just the right thing to do, it is the smart thing to do. hours a day, seven days a week. There is evidence that diversity in the boardroom delivers better • Building talent pools outcomes for shareholders. To benefit from increased diversity in the resources sector, we also need to ensure we are building a greater pool of talent. In recent years, strong progress has been made on this front and Nationally, female participation in the trades servicing the I am proud to be part of a company with over 50 per cent female mining industry is only one per cent and at Fortescue we are representation on our Board of Directors. helping build a pipeline of women who are ready to pursue a However, if you look at Australia’s top ASX100 companies, there career in the trades. are currently more CEOs with the name ‘Dave’ or ‘John’ than there Programs such as Fortescue’s Trade Up and Vocational are women CEOs. Corporate Australia needs to address this by Training and Employment Centre (VTEC) are providing focussing on leadership development, retention of female talent female team members with practical measures to gain trade and ensuring more balance and flexibility in the workplace to qualifications. Since 2006, more than 200 Aboriginal women ensure we have equal representation of genders in the C-Suite have been trained and employed through VTEC, representing roles. In turn, this will ensure we have a strong pipeline of Board 25 per cent of all participants in the program. ready candidates, both male and female. At our rail operations, we are trialling a traineeship program Our recently lodged Workplace Gender Equality Act report details aimed at female school leavers, offering entry-level positions Fortescue’s achievements and goals in creating equality and and providing a clear career pathway. diversity, including increasing our female employment from 16.7 per • Creating safe working environments cent in May 2017 to 17.3 per cent in May 2018. We are on our way to We aspire to create a space where every member of the reaching our goal of a 25 per cent female workforce by 2020. Fortescue family is safe and as part of this focus are currently focused on becoming a White Ribbon Australia While we are pleased to see the steady increase in our female accredited workplace. participation rate, diversity is not simply about filling a quota. To achieve a truly diverse workplace, an embedded culture of This is an important step in our commitment to be an inclusion is critical and this is a responsibility which lies with the industry leader on important issues impacting women and entire workforce. encouraging everyone to stand up, speak out and act to prevent domestic violence. Fortescue is proud to have introduced a number of leading Implementing initiatives that cater to a diverse workforce workplace diversity initiatives: sends a strong message about our organisation’s attitude to • Flexibility in the workplace inclusivity and the expectations of our people. We hope that Setting the tone for an inclusive, flexible workplace starts with by ‘walking-the-walk’ we are breaking down the silo mentality leaders genuinely understanding the needs of individual team and encouraging a unified, inclusive team. members and offering a variety of flexible working options, Of course, inclusivity extends beyond gender and includes including job share, part-time and flexible start and finish ethnicity, religion, sexual orientation and those living times. These options should not just apply to an office-based with a disability. None of these should result in an unfair workforce but should extend to all roles, including those on disadvantage or voice that is less important than others. shiftwork or a fly-in, fly-out roster. For a company to be the best it can be, it needs to harness the The implementation of these working options as well as a very best ideas across every part of its business and empower its flexible workplace is significant in supporting gender diversity workforce to collaborate across all levels. and inclusivity, especially for parents juggling their careers and family commitments. The best results will come from a diverse workforce who have a broad range of backgrounds, skills, experience and personalities and who are supported and encouraged to reach their full potential. Elizabeth Gaines, CEO

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Fortescue is proud to have introduced a number of leading workplace diversity initiatives.

Case Study Career Resiliency Program

To be the best Company Fortescue can be, it needs the very Over four sessions, participants put together a detailed best ideas across every part of its business. career development plan which helps them build career The best ideas come from a diverse workforce and the Company pathways, business relationships and effective leadership and needs to ensure its talented women have the opportunity to communication skills. reach their full potential. Remuneration Analyst Danielle Gillman, said the program was a Fortescue’s Career Resiliency Program forms a critical aspect fantastic opportunity to further develop her skills. of the Company’s ongoing commitment to diversity and “It was great to hear from different female leaders from around inclusivity. The program supports female employees identified as having leadership potential to focus on their career direction the business and take inspiration from their career journeys,” and to take responsibility for their career development. she said.

45 06 | Setting high standards

Objective Target Progress Continue to increase Company-wide target set at 25% In FY18, the number of female employees increased to 1,002, an female employment female employment by 2020 increase from 17.3% in FY17 to 17.4% in FY18 rate 24% of Fortescue’s senior management team are female, an increase from 20% in FY17 Fortescue will continue to enhance its programs and initiatives to meet its 2020 targets

The FY18 target of 25% participation overall was exceeded in the following programs: • Fortescue’s Trade Up - 42% • Graduate Program - 100% • VTEC - 40%

Build talent pools Set targets for internal and external Female applicants make up 20.2% of the pool, with women achieving recruitment providers of 20% female 22.8% of roles employment

Attract parents to return to work 96.3% retention rate of employees returning from parental leave following career breaks A Business Update event was held in FY18 at the Fortescue Centre for parents wanting to return to the workplace after having children

Employees are encouraged to participate in ‘Keeping in Touch days,’ where employees have the option of working up to 10 days (not continuous) during the Unpaid Parental Leave period to assist with the transition back to work. Support is also provided during the parental leave period through the Fortescue People department

Encourage female employees to obtain In FY17, Fortescue’s Trade Up was opened to all women. 11 females professional qualifications form part of Fortescue’s Trade Up which is close to 42% of the overall participants

Fortescue encourages female employees to obtain qualifications and further their career opportunities through its six monthly performance review program Success Factors and through the Career Resiliency Program

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 During FY18, Fortescue placed a greater emphasis on female team members’ career progression, while continuing to focus on existing programs which promote diversity.

Objective Target Progress Create a workplace Celebrate success in diversity through During FY18, 6 Northern Spirits recipients were recognised for their which supports the Company’s recognition programs role in encouraging female employees to thrive diversity Encourage all eligible employees to During FY18, the number of both males and females accessing access paid parental leave and to primary carer’s paid parental leave increased from previous years return to work following parental leave 347 direct employees utilised flexible working arrangements, an increase from 247 in FY17

Provide childcare Operate Fortescue Family Room at Fortescue’s Family Room operates 24 hours per day and has cared for options so employees Fortescue Centre in Perth 60 children over 971 stays since August 2017 can balance work and Support employees with family During FY18, the numbers of family and friends hosted at each family responsibilities responsibilities through family site site was: visits and community based family support Port and Rail (Hedland Operations) 184 Cloudbreak 329 Christmas Creek 233 Solomon Hub 209 Total number: 955

Support and promote Identify females with leadership During FY18, 40 were females identified as having leadership opportunities for potential through talent reviews and potential and participated in two Career Resiliency Programs aspiring female ensure participation in Leadership The program is designed to empower and support high performing leaders Development Programs female employees in developing their career path. The program is an important career development opportunity for women at Fortescue and is a critical part of Fortescue’s ongoing commitment to diversity and inclusivity

Continue the Career Resiliency 3 females participated in the CEO for the Day Program in FY18 Program, the CEO for the Day initiative 40 women participated in the Career Resiliency Program in FY18 and mentoring programs Fortescue continues to encourage and support its mentoring program, Rookies and Coaches, that is available to all employees 47 06 | Setting high standards

Fortescue undertakes an annual wages Remuneration is adjusted according to the Fortescue has a proud history of benchmarking assessment to ensure that results of these reviews. championing Aboriginal diversity. The wages are comparative with those within Company’s Aboriginal engagement journey A role by role gender pay review has the Australian mining industry and that been successfully conducted for the last is captured under ‘Creating opportunities for equitable remuneration exists for like-for- three years and female employees whose Aboriginal people.’ like roles, independent of gender, race, age remuneration was identified as less than and culture. male peers in the same role was adjusted.

Case Study Fortescue recognised for gender diversity

Fortescue was recognised by the Bloomberg Gender- Fortescue was the only mining company amongst the six Equality Index (GEI) for supporting a gender diverse Australian companies recognised. environment across the business. Fortescue was also recognised as the winner of the Australian The GEI measures gender equality across internal company Women in Resources Alliance (AWRA) award at the 2017 AMMA statistics, employee policies, external community support and National Conference. The award recognises organisations that engagement, and gender-conscious product offerings. develop innovative strategies to improve women’s participation in the mining industry.

Case Study Fortescue Family Room

As part of Fortescue’s broader commitment to diversity a day, seven days a week, for up to six hours at a time to support and inclusion, the Company opened the Fortescue Family those working over different shifts. A third party provides Room in its Perth head office in 2017. The Family Room was qualified carers in a crèche style set up so parents do not need introduced as a practical initiative to help team members to remain in the family room itself, but stay on site. All costs are balance work with family life and support those returning to covered by Fortescue. work after having a child. Project Manager Joh Hopfmueller, has used the family room Since its opening, the service has supported 60 families through a number of times. “The Fortescue Family Room gives me the 971 stays and has become an important part of Fortescue’s flexibility to work while my son is having fun and being cared unique culture. for in the same building. The carers are fantastic and I love being able to have lunch with him. My son loves coming to work with Offering care on a casual basis, the Family Room is open to me,” Joh said. children aged eight weeks and above and is available 24 hours

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Looking forward - • Continuing to enhance recruitment processes to ensure a strong pipeline of Extended Flexible FY19 diversity plan female applicants Working Guidelines Ensuring Fortescue’s commitment to • Further consultation with employees diversity is embedded in the Company’s for prospective site concerning diversity initiatives culture will be fundamental to the and retention strategies for female and Perth based sustainability of diversity initiatives. employment such as leadership Fortescue will continue to focus on these employees will launch development, child care options, breast key areas: feeding facilities, flexible working in the first quarter • Flexible working arrangements for arrangements and the inclusion of of FY19. site and Perth based employees, and key performance indicators for sites extending flexible working arrangements concerning gender equality to new employees • Increasing awareness of the benefits of • Redeployment and retraining of employees workplace diversity - promoting ‘diversity impacted by innovation projects of thought’, integral to further business growth and driving innovation • Continuing to support families through the operation of the Fortescue Family • Launch of extended Flexible Working Room and considering options for site- Guidelines for prospective and Perth based based employees employees in the first quarter of FY19.

• Career progression for females moving towards senior roles

Case Study Flexible working arrangements in Ecuador

As Fortescue increases its presence and exploration activities in Latin America, specifically Ecuador, Colombia and Argentina, the Company is committed to providing training and employment opportunities for local communities.

The Company is currently undertaking exploration activities To ensure the employees were able to continue to maintain their in the southern region of Santa Ana where local community farms, the roles were established as shared roles where each members predominantly tend to small family farms. field assistant is able to work two weeks on, two weeks off.

Fortescue has engaged with the local community to create field This arrangement has allowed members of the community assistant roles to assist exploration activities. to earn additional income and gain valuable skills whilst still maintaining their farms during their two weeks off.

49 06 | Setting high standards

Reportable heritage 5,597 incidents Active heritage m places managed 0 2.1Hectares ethnographically surveyed

Protecting Aboriginal Fortescue considers these pillars critical to its proposed approvals and opportunities to focus of ensuring compliance with legislation improve processes. heritage and agreements, fostering and protecting During FY18, Fortescue supported a number stakeholder relationships and allowing Objective of heritage-related projects including Work together with Aboriginal people to Fortescue to understand and sustainably manage the Aboriginal cultural landscape. The Keeping Place project, which is an manage Aboriginal heritage responsibly innovative, user friendly and safe tool for and sustainably. Fortescue has no impact on Aboriginal collecting, protecting and appropriately heritage without free, prior and informed sharing cultural knowledge. The project Target consultation, and wherever possible, sites is designed, owned and managed by Annually, ensure Fortescue has no impact of significance are protected from impact, Aboriginal people. The software enables to Aboriginal heritage without free, or mitigation measures are agreed and co-founding partners Nyiyaparli and prior and informed consultation with implemented. Conducting heritage surveys Yinhawangka People to regain data Aboriginal people. early in the planning phase, together sovereignty, apply cultural protocols, with detailed consultation enhances improve governance and unlock social Fortescue’s capacity to avoid and protect Working together to protect and economic opportunities for current Aboriginal heritage. Aboriginal heritage and future generations. Fortescue also For the third consecutive year, Fortescue is continued to support the Gamburlarna The identification and management proud to report there were no reportable Project and Foundation, with the vision of of Aboriginal heritage is fundamental heritage incidents on Aboriginal heritage developing opportunities for Yindjibarndi to Fortescue’s approach to operating sites in FY18. engagement, employment, education and sustainably and the Company’s ongoing enterprise around Yindjibarndi knowledge. commitment to protect and promote Fortescue consults closely with its Native Title Partners (NTPs) and State and Federal Aboriginal history and culture. This Fortescue is currently working with its Governments to responsibly manage commitment is enshrined in Fortescue’s NTPs to refresh its Cross Cultural Awareness Aboriginal heritage, ensure the protection Values, and is measured against four training program and will commence the of Aboriginal culture and heritage sites and foundational pillars: new program in September 2018. Cross comply with all applicable legislation. The Cultural Awareness training was delivered • Meaningful consultation with Aboriginal Company is committed to open, transparent to 1,299 employees and contractors during people and their representatives and inclusive communication and believes • Implementation of effective business partnerships with Aboriginal communities FY18 with 8,499 heritage inductions systems and processes contribute to creating a positive heritage delivered to contractors and employees • Contributions to research and the legacy for future generations. During FY18, since its inception in 2006. ‘Aboriginal estate’ heritage team employees organised six Fortescue’s Sustainable Heritage Report • Ongoing education and engagement heritage sub-committee meetings and for 2017, which provides additional detail with Fortescue’s workforce. attended a further 13 meetings with NTPs. on the Company’s work in this area in Heritage sub-committee meetings provide a approvals, compliance and project activities, forum to discuss heritage survey outcomes, was published during FY18.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Native Title Partners Title claim groups into Indigenous Land Use The ILUA process offers Fortescue’s NTPs the Fortescue continues to build on its long- Agreements (ILUAs). LAAs remain in place opportunity to work more closely with the standing relationships with NTPs and has with each of the Martu Idja Banjima, Eastern Company to deliver greater opportunities to comprehensive agreements in place with Guruma, Puuti Kunti Kuruma and Pinikura their communities. Fortescue looks forward seven Native Title groups. Native Title holders, and a Project Area to continuing the conversion process into Agreement with the Njamal People Native the future with other NTPs. In 2018, Fortescue completed the process Title claim group. of supplementing its three earliest Land Access Agreements (LAAs) with the Kariyarra, Palyku and Nyiyaparli Native

Case Study Celebrating 15 years of partnerships with the Kariyarra, Palyku and Nyiyaparli People

In 2018, Fortescue marks 15 years since land access Seven years ago, Fortescue commenced re-negotiating some negotiations commenced with the Palyku, Kariyarra and of the LAA terms with three of its key Native Title Partners, with Nyiyaparli Native Title claim groups. the purpose of registering the final agreements as ILUAs. After extensive negotiation and collaboration, the final ILUA was Fortescue was determined to forge a new approach to Native Title registered with the National Native Title Tribunal on 8 March 2018. agreements by delivering unprecedented opportunity to Native Title Partners and Pilbara Aboriginal people in the form of training, These new agreements provide Fortescue and the Native Title guaranteed employment, housing and business opportunities. holders with increased certainty and confidence to continue to grow and provide even greater benefits and opportunities to the In October 2005, Fortescue executed LAAs with the Nyiyaparli, Kariyarra, Palyku and Nyiyaparli Peoples. Kariyarra and Palyku people providing Fortescue and Native Title parties with certainty in relation to land access obligations. Fortescue hosted a celebration in Port Hedland with its valued Nyiyaparli, Kariyarra and Palyku partners in July 2018 to recognise Over time, and after working closely with its Native Title the recent registration of its ILUAs. It provided an opportunity Partners, Fortescue recognised the need to amend these to reflect upon all that has been achieved together, and discuss agreements to further strengthen its relationship with Native future opportunities. Title Partners and to better reflect changing legislative, regulatory and industry requirements.

51 06 | Setting high standards Fortescue’s commitment to doing business with integrity and honesty is built on the Company’s Values.

Ethical conduct, Ethical conduct Fortescue employees are subject to Fortescue operates under a Code of Conduct Performance Assessments every six months bribery and corruption and Integrity which reflects the Company’s where adherence to the Code of Conduct Objective Values and represents its commitment to and Integrity is assessed and reported. To ensure Fortescue’s corporate Values uphold the highest ethical business practices. Remuneration is linked to these assessments. The Code applies to the directors, employees, reflect ethical conduct and respect and During FY18, 13 Whistleblower disclosures contractors, suppliers and business partners are embedded in the business through were reported either in person or through of Fortescue, its subsidiaries and related leadership, training, performance Fortescue’s Whistleblower system. The companies over which it has control. assessment and remuneration. Whistleblower system, accessed by an Target The Code defines Fortescue’s commitment online portal, phone or email, provides an to achieving and maintaining its reputation • By mid FY18, further embed ethical independent, anonymous and confidential as an employer of choice, an ethical business conduct within Fortescue mechanism for anyone to raise concerns partner and a good corporate citizen. regarding potential illegal activity or • Annually, meet and exceed global It reflects the policies which govern breaches of Fortescue’s Code of Conduct and anti-bribery and corruption standards Fortescue’s business activities including: Integrity. Each incident was investigated by including requirements in respect to US • Health and Safety Policy Fortescue’s Corporate Governance Manager, Foreign Corrupt Practices Act (FCPA) and UK • Procurement Policy with the assistance, where required, from Anti-Bribery Act. • Diversity Policy Fortescue’s Employee Relations Manager. A • Anti-Bribery and Corruption Policy number of these investigations have resulted • Human Rights Policy in corrective actions, including warnings and Fortescue’s commitment to doing business • Equal Opportunity, Harassment and in some cases, termination. with integrity and honesty is built on the Bullying Policy Company’s Values, the professionalism of its As Fortescue’s expansion into overseas • Securities Trading and Continuous employees and a collective responsibility to jurisdictions grows, the business recognised Disclosure and Market Communications a need for the Whistleblower system to be act with accountability and transparency. Policies multilingual and accessible from anywhere The Company articulates and maintains • Appropriate Use of Information in the world. Therefore, in FY19, Fortescue ethical business principles and practices Technology Policy. will be upgrading its existing Whistleblower and implements sound systems of Each employee and contractor must ensure system to include multilingual capabilities. corporate governance. they are familiar with the Code, which is accessible both in printed and electronic In FY19, Fortescue will continue to embed formats on Fortescue’s website and intranet. ethical conduct through programs targeting Training is provided to reinforce information leaders, training, performance assessment contained in the Code. and remuneration.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Anti-bribery and corruption • A number of channels for employees • Contributing to the policy work of Bribery and corruption undermines and third parties to anonymously report industry groups, including: legitimate business activities, distorts suspected or actual misconduct or - Business Council of Australia competition and exposes Fortescue and violations of Company policy, including - Association of Mining and Exploration its people to significant risks. Fortescue the Whistleblower reporting system Companies (AMEC) has a zero-tolerance approach to bribery (where complaints can be lodged - Australian Mines and Metals Association and corruption and has a specialist via phone, email or through a web- - Australia-China Business Council Corporate Governance Manager to based portal). - Chamber of Commerce and Industry of oversee compliance with anti-bribery There were no violations of anti-bribery Western Australia (CCI). and corruption laws. Employees who are and corruption laws detected within or in found to have breached anti-bribery and During FY18, Fortescue had paid connection to Fortescue in FY18. corruption laws are subject to disciplinary memberships with the bodies listed action which may include termination. Public policy above and DomGas Alliance, equalling approximately A$220,000 in membership fees. Fortescue’s anti-bribery and corruption As an Australian Company listed on the ASX compliance program includes: that employs large numbers of people and Political donations • Participation in voluntary anti-corruption contributes to the growth and development Fortescue does not make political donations initiatives, including the Corporate of the Australian economy, Fortescue to any political party, politician or candidate Business Integrity Council has a responsibility to its shareholders, running for public office in any country. • Fraud and corruption risk assessments customers, employees and stakeholders Attendance at party-political functions that consider the potential fraud, to understand and contribute to public is permitted where there is a legitimate bribery and corruption risks associated policy development and ensure that its business reason. Attendance at these with the business, third-party partners organisation and operating environment is and geographic locations in which the understood by policymakers. functions must be approved by the Director Company operates Community, Environment and Government. The Company participates in public policy by: • A commitment to sourcing from suppliers that adhere to Company standards, • Making submissions to inquiries and including the Human Rights Policy, industry consultation processes, Code of Conduct and Integrity and where appropriate Procurement Policy • Participating in public discourse • Prohibition of the giving and receiving of • Holding direct meetings with gifts in connection with the Company’s stakeholders operations which go beyond common • Hosting stakeholder visits to its courtesies associated with general operations commercial practice • Participation in industry, public policy and political conferences and seminars 53 06 | Setting high standards Fortescue’s approach As a proud Australian Company, Fortescue stakeholders with relevant tax information, operates transparently and in good faith with Fortescue is able to build a deeper to tax the Australian Tax Office and seeks to have understanding of its tax profile. Corporate governance and transparency good working, collaborative relationships Fortescue’s continuous review of internal are essential and important elements with all revenue authorities where its tax policies, industry best practice, feedback of Fortescue’s reputation; and impact the business is undertaken. The Company from key stakeholders and legislative Company’s ability to create and deliver is fully compliant with the prevailing tax developments, further underpins the value for its shareholders and the laws of all jurisdictions in which it operates Company’s commitment to tax transparency. broader community. and is classified as a compliant and low risk In 2016, the Australian Board of Taxation Fortescue’s Board is responsible for taxpayer by all revenue authorities. In the last (BoT) released a voluntary Tax Transparency ensuring that a robust system of internal five years, no adjustments have been made Code (TTC) setting a number of principles and minimum standards to guide controls is in place for tax governance to Fortescue’s tax payments following income additional disclosures of tax information by purposes. Fortescue’s comprehensive tax reviews by relevant authorities. multinational businesses. The TTC is divided Tax Governance Framework is the key Fortescue accepts a low level of risk in into two parts, with the BoT recommending policy that governs the management relation to major transactions and tax that Part A and Part B be adopted by large of tax related risks in Australia and in all compliance activities and undertakes to businesses such as Fortescue. After adopting relevant overseas jurisdictions. The Board file only verified tax positions. Where the the requirement in FY17, this is Fortescue’s of Directors receive regular updates and application of the tax legislation is unclear, second year of Financial Report tax assurances from senior management Fortescue seeks external tax advice support disclosures in line with the BoT’s TTC. as to the operation and effectiveness of and consults with the relevant taxation In order to comply with Part A of the TTC, Fortescue’s tax management framework. authorities to achieve an appropriate level Fortescue has extended a number of disclosures contained within its annual Fortescue is committed to ensuring of certainty. financial report since FY17. Part B of the communities benefit from the growth and Tax Transparency Code report is intended to detail Fortescue’s development of its businesses and is proud Fortescue is committed to transparency approach to tax strategy and governance, as of its contribution to the state and the across all aspects of its business, including in well as providing additional information on nation’s economic strength. relation to its tax obligations. By providing overseas operations and international related the Company’s investors and other external party transactions.

TAX GOVERNANCE FRAMEWORK

BOARD OF DIRECTORS Audit and Risk Management Committee

Chief Executive O cer

Chief Financial O cer

GM Tax Fortescue business operations Fortescue tax team Revenue Authorities

Fortescue’s tax team is proactively involved in business operations and seeks external tax advice when necessary Corporate objectives 1 Manage Risk 2 Timely and accurate disclosures 3 Preventative and detective controls

Tax strategy

Transparency Operates in good faith Low risk Compliance Collaboration

VISION AND VALUES

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Total tax contributions In addition, given the current structure of The following additional information Fortescue operates primarily in Australia, Fortescue’s international operations, some provides important context for the along with a number of international companies are subject to the Australian information anticipated to be published by locations. The Company pays taxes Controlled Foreign Company (CFC) rules. the ATO: according to the prevailing laws in each Under these rules, profits generated by • The information provided by the ATO jurisdiction. Taxes applicable to Fortescue’s relevant overseas entities are attributable only reflects Fortescue’s Australian business include: and taxable in Australia at the 30 per cent accounting tax consolidated group, • Company taxes Australian corporate tax rate. which is comprised of Fortescue and its • Value added taxes A summary of Fortescue’s FY18 tax 100 per cent wholly owned subsidiaries in • Royalties obligations and tax history are detailed Australia • Stamp duties below. • Total income represents gross revenue • Excise and import duties from all operating activities and not • Withholding taxes Australian Tax Office (ATO) Fortescue’s profit. Fortescue’s Australian • Comprehensive employer taxes such as publications accounting profit for the year ended 30 fringe benefits taxes, payroll taxes and Each December, the ATO issues a Report June 2017 was A$3.695bn. of Entity Tax, which provides high level various employee insurances. The income tax payable of A$1.03bn is details of Fortescue’s income tax return. determined by multiplying Fortescue’s Fortescue also collects and pays a number The following details are expected to be taxable income of A$3.56bn by the 30 per of additional taxes beyond those directly published by the ATO in December 2018 for cent corporate tax rate and then deducting attributable to the Company. These include Fortescue’s income tax return lodged for the eligible tax offsets, such as the research and PAYG withholding tax from salary and wages prior financial year ended 30 June 2017. All development (R&D) incentive and foreign paid to employees. figures are disclosed in Australian Dollars. income tax offset (FITO) credits, totalling As Fortescue’s principal operations are ABN 57 002 594 872 A$38m for the year ended 30 June 2017. located in Australia, the majority of the Company’s tax liabilities are paid in Total Income A$9,795,448,360 Income tax payable = (Fortescue’s taxable Australia. Taxable Income A$3,561,403,370 income x corporate tax rate of 30 per cent) – eligible tax offsets Income Tax Payable A$1,031,795,895 (A$3.56bn x 30%) – A$38m = A$1.03bn

Total tax contribution comparative

A$ 2,500m

2,000m

1,500m

1,000m

500m

FY14 FY15 FY16 FY17* FY18*

Company Royalties Foreign Employment

*For further detail on FY17/FY18 comparitives, refer to Part A of the TTC as contained within the Notes to Fortescue’s Financial report Tax data note 14 55 06 | Setting high standards

International related party through the lodgement of tax returns and financing and management arrangements transactions other statutory disclosures to revenue with its international related entities. The net Fortescue is a proud Australian Company authorities, including Fortescue’s detailed impact of these arrangements is immaterial and has a relatively small proportion International Dealings Schedules and to the overall trading consolidated revenue of international related party dealings. Country-by-Country reports. position of the Fortescue Group. As part of Fortescue’s tax strategy, all For FY18, the gross value of all international The Fortescue Group includes a number international related party dealings are related party transactions in and out of of active subsidiary companies that are priced in accordance with the requirements Australia was immaterial. In addition to the incorporated in jurisdictions outside of of relevant Australian and foreign tax international related party transactions Australia. These are summarised in the table legislation. Fortescue discloses all material noted below, Fortescue has a number of below: international related party transactions

Jurisdiction Nature of activities Singapore* • FMG International Pte Ltd (FMGI) is a Singaporean resident entity, which is 100% directly owned by Fortescue • Since 2012, FMGI manages the majority of Fortescue’s shipping services including chartering activities, voyage operations, technical and crew management, as well as the commercial management of Fortescue’s ore carriers • Under a Transportation Operations Agreement, FMGI provides ship management services to FMG Hong Kong Shipping Ltd (FMGHKS) • FMGI lodges an income tax return in Singapore and consequently pays income tax at the prevailing corporate income tax rate of 17% on its total taxable income for the financial year. In Australia, the majority of the taxable income in Singapore is attributed back to Fortescue under the CFC provisions and taxed at 30% Guernsey* • GMF Insurance Limited (GMF) is a captive insurance company which provides insurance services to Fortescue and its subsidiaries • GMF is domiciled in Guernsey and is a Guernsey resident for tax purposes. The Company is taxed at the standard rate of tax in Guernsey of 0%. However, under the Australian CFC provisions, the total taxable income of GMF is attributed back to Fortescue in Australia and taxed at 30%

Hong Kong Magnetite Investment • In 2013, Fortescue and Formosa Plastics Group (Formosa) announced a joint venture, established to develop and operate the FMG Iron Bridge project. FMG Iron Bridge Ltd (FMG IB) is a Hong Kong resident company which is jointly owned by Fortescue (88%) and Baosteel Resources International Co. Ltd., a subsidiary of China’s Baowu Group (12%) • FMG IB was incorporated as a result of a restructure of Baosteel Resources interest in the magnetite tenements and it does not generate any active income and therefore does not pay any taxes in Hong Kong. As there is currently no active business, Fortescue does not incur any income tax liability for FMG IB in Australia Shipping Services • Fortescue’s fully owned subsidiary, FMGHKS provides iron ore transportation services to wholly owned subsidiary FMG Pilbara Pty Ltd (‘FMG Pilbara’) under a Transportation Services Agreement utilising ore carriers America • FMG America Finance Inc has been Fortescue’s registered holder of certain US dollar debt facilities • Fortescue has not generated any income in America for the year ended 30 June 2018 New Zealand and South America • Fortescue undertakes minor exploration activities through its subsidiaries FMG Pacific Ltd (incorporated in New Zealand) and EcuadorFortescue SA, Colombia Fortescue SAS and Argentina Fortescue SAU (all incorporated in South America). • During FY18, Fortescue has further expanded its exploration activities in South America, including setting up offices in Ecuador, Colombia and Argentina • Fortescue has not generated any income in New Zealand and South America for the year ended 30 June 2018

*These companies are subject to the Australian CFC rules. Under these rules, profits generated by these subsidiaries from the trading with Fortescue are taxable at the Australian Corporate Tax rate, allowing for credit for any foreign taxes paid.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 07 Creating positive social change

57 07 | Creating positive social change Opportunity Empower Aboriginal people through engagement and by using Fortescue’s influence and resources to create generational change to the lives of Aboriginal people.

Building business Fortescue is in the privileged position The Billion Opportunities Program is of being able to empower individuals complemented by a range of additional capabilities with the capability and capacity to effect practical measures introduced by Fortescue Objective positive change in some of Australia’s to provide Aboriginal businesses with the Create economic opportunities for Aboriginal most socioeconomically disadvantaged tools to build value and sustainability. communities, in particular, Aboriginal businesses through local procurement, Fortescue is also committed to spending business development, mentoring and communities. a portion of its procurement budget with capacity-building opportunities. In February 2018, Fortescue’s Billion Aboriginal businesses. In FY18, Fortescue Opportunities Program marked a significant Target spent approximately A$230 million with milestone, recognising the award of A$2 By 2021, achieve a spend of 10 per cent 52 Aboriginal businesses, representing 7.5 billion in contracts and subcontracts to of total procurement with Aboriginal per cent of the Company’s total contestable Aboriginal businesses and joint ventures. businesses, with 50 per cent of the number of procurement spend with more than 90 per contracts awarded to businesses which have The Billion Opportunities Program cent of the spend awarded to businesses more than 50 per cent Aboriginal ownership. commenced in 2011 as an initiative to owned by Native Title groups (and their promote sustainable business opportunities members). Fortescue also awarded or for Aboriginal people and has since awarded extended 34 contracts and subcontracts to 270 contracts and subcontracts worth more Aboriginal businesses with a value of more than A$2 billion to 110 Aboriginal businesses. than A$143 million. Of these, 59 per cent The program forms a critical element of the were with Aboriginal businesses that have Company’s approach to ensuring economic Aboriginal ownership greater than 50 per cent. opportunity and participation through Native Title agreements.

L to R: Premier Mr Mark McGowan MLA, CEO Elizabeth Gaines, PT Kingkira Director Tammy O’Connor, Chairman and Founder Andrew Forrest AO, Nyunggai Warren Mundine AO, Former CEO Nev Power, Nyungar Elder and Managing Director, Redspear Safety Barry McGuire

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 A$230 million A with 52 Aboriginal businesses in FY18 $2bn 270 contracts in contracts and subcontracts to 110 Aboriginal businesses since 2011 since 2011

Total value of contracts awarded A$2.06bn

A$2.0

A$1.5 A$billion

A$1.0

A$0.5

FY12 FY13 FY14 FY15 FY16 FY17 FY18

Spend per year against iron ore price

A$350m 180

160 A$300m 140 A$250m 120

A$200m 100

A$150m 80 60 A$100m 40

A$50m 20

0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Spend per year (A$ million) Iron ore price (US$ 62% FE S/dmt) 59 07 | Creating positive social change

Case Study Fortescue and ANZ launch new funding model to support Aboriginal businesses

Fortescue, in partnership with ANZ, has initiated a A$50 million funding scheme to allow eligible Aboriginal businesses to access finance at a competitive rate, to lease required assets. Under the initiative, Fortescue provides support to Aboriginal businesses that supply services to Fortescue through a guarantee. The initiative was officially launched by Senator the Hon Nigel Scullion Minister for Indigenous Affairs, in September 2017.

The initiative followed ongoing consultation with Aboriginal Jilpanti Enterprises Pty Ltd, a 100 per cent Aboriginal-owned groups and businesses that identified access to capital to business, was the first business to benefit from the innovative fund income generating assets as a major barrier to building financing arrangement. Part of a A$30 million joint venture with sustainable businesses. Cross Verwijmeren, Jilpanti Enterprises provides exploration related earthworks for Fortescue. This practical measure provides these businesses with tools to help build value and sustainability, which in turn creates Under the agreement, Jilpanti will be provided access to employment and development opportunities. A$1.2 million in funding to purchase equipment needed as part of the three year contract with Fortescue.

Fortescue won the Supply Nation Corporate 2018 Corporate Member of the Year Member of the Year award for the third time at the 2018 Supplier Diversity Awards, 2017 Corporate Member of the Year and Outstanding Impact award recognising the Company’s substantial 2016 Corporate Partnership of the Year with Print Junction contribution to Aboriginal procurement. Fortescue has been a member of Supply 2015 Corporate Member of the Year and Supplier Diversity Advocate of the Year Nation since 2013, and has received the 2014 Supplier Diversity Partnership Award with ICRG Guma following awards at the annual Supplier Diversity Awards.

Case Study Shelter Belt

In 2018, Fortescue partnered with IBN Services, the Pilbara’s The shelterbelt or ‘green windbreak’ is part of a number of only commercial native plant nursery, to plant a vegetation environmental controls to manage dust at Fortescue’s Port. shelterbelt around its Port operations. Other initiatives include a boundary monitoring network, sealing of trafficable areas and the use of belt wash stations and Around 3,000 trees were purchased from IBN Services, a wholly under belt sprays on conveyors. owned subsidiary of IBN Corporation, a leading Aboriginal organisation owned by the Yinhawangka, Banyjima and The shelterbelt is a more sustainable long-term solution to Nyiyaparli people. The trees were planted to form a 2.2 kilometre engineered wind fences and also provides soil stability during by six metre shelterbelt to decrease wind speeds to reduce the rain events and flooding. capacity for open areas to generate dust.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 14.1% Aboriginal employment

Employment Target Fortescue has a proud history of • By 2020, achieve an employment rate championing Aboriginal employment and opportunities for of 20 per cent Aboriginal people strives to provide training, employment and Aboriginal people across Fortescue development opportunities for Aboriginal people. Fortescue is leading the way in Objective • By 2020, achieve an employment rate Aboriginal employment within large mining Train, employ and develop Aboriginal people of 10 per cent Aboriginal people in companies and currently directly employs within Fortescue and its contractor partners. leadership roles 810 Aboriginal people, representing 14.1 • By 2022, achieve an employment rate of per cent of the total workforce. The total 20 per cent Aboriginal people in number of Aboriginal people working on skilled trades. Fortescue sites is 1,161 which includes direct employees, labour hire and contractors.

Meet Megan Lockyer, a Drill and Blast Operator Outside of her role as a Drill and Blast MeetMegan Megan Lockyer Lockyer at Solomon Hub, was a finalist in the Operator, Megan raises awareness of Megan Lockyer, a Drill and Blast Operator at Solomon,2018 was Chamber a finalist of Minerals in the 2018 and Chamber Energy of Mineralsthe effects and Energydomestic has violence in of Western Australia (CME) Women in Resources People’sof Western Choice Australia Award. (CME) Women in the community. Resources People’s Choice Award. Megan, a Ngarluma, Yindjibarndi and Kuruma woman from Roebourne, began her career in theMegan resources is also a role model for young girls Megan, a Ngarluma, Yindjibarndi and in her community and is part of numerous industry as a clerical trainee before chasing her dream to work in the field with big machinery. Kuruma woman from Roebourne, began leadership groups for Aboriginal women. Outside of her role as a Drill and Blast Operator, Meganher career raises in awareness the resources of the industry effects as aof community and domestic violence. Megan is also a role model for clericalyoung traineegirls in herbefore community chasing her and dream is part to of numerous leadership groups for Aboriginal women. work in the field with big machinery.

61 07 | Creating positive social change

Fortescue implements a range of development and support initiatives to assist Aboriginal people in gaining employment with Fortescue.

Fortescue implements a range of development and support initiatives to assist Aboriginal people in gaining employment with Fortescue. Engagement initiatives prioritise practical solutions to provide support to Aboriginal people in the workplace. The objectives for FY18 and progress towards these are summarised below.

Objective Progress Promote Aboriginal participation, with a target of 20% Fortescue currently employs 810 Aboriginal people, 14.1% of the total by 2020 workforce. The total number of Aboriginal people working on Fortescue sites is 1,161 which includes contractors

The Company will continue to enhance its programs and initiatives to meet its 2020 targets

Build talent pools through opportunities within • 22 people completed VTEC training in FY18 Fortescue’s programs for Aboriginal people • 75 Trade Up trainees were employed during FY18 • 81% of Trade Up employees were Aboriginal

Create a workplace which supports Aboriginal • Key programs supporting Aboriginal employees: employment - Fortescue’s Trade Up - Cultural awareness training of all employees - Leadership and Excellence in Aboriginal People Program (LEAP) - Regional FIFO - CEO for the Day Program - Aboriginal development team support - Housing support - Aboriginal Health Programs

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Objective Progress Provide family support options including organising All Fortescue sites hosted family visits during FY18, with total numbers family site visits and implementing a plan for detailed below: community based family support Port and Rail (Hedland Operations) 184 Cloudbreak 329 Christmas Creek 233 Solomon Hub 209 Total number: 955

The following key Aboriginal community-based programs were supported during FY18: - Hedland Trade Training Centre - Community Support Grants - Roebourne High School Working Bee - Jawun - Big hART - National Indigenous Hockey Program - Hedland Women’s Refuge - Mingle Mob

Promote opportunities for Aboriginal employees • During FY18, 38 Aboriginal employees participated in the LEAP Program to move into the LEAP Program and CEO for the • 4 Aboriginal employees participated in the CEO for the Day Program Day Program • 1 Aboriginal woman completed the Career Resiliency Program

63 07 | Creating positive social change FORTESCUE’S VTEC TIMELINE

VTEC 2006 06 The beginning BEGINS Fortescue’s VTEC began in an office in South Hedland Shopping Centre The first 20 Aboriginal people graduated from 07 Fortescue’s VTEC and commenced full-time employment with the Company, working on the 07 rail construction project. Fortescue established the Driver Training Program 08 in partnership with the WA Department of Transport. This allowed Fortescue to facilitate 08 testing and provide Learner’s Permits on behalf of the State. As part of the Australian Employment 09 Covenant, Fortescue established ‘Summit 300’, a Company-wide commitment to train and employ 09 300 Pilbara Aboriginal people in two years. Fortescue’s Aboriginal Health Program began 10 providing support for VTEC trainees facing health VTEC opened in Roebourne in partnership with 10 issues such as diabetes. 10 Pilbara TAFE, now known as Northern Regional TAFE.

Fortescue achieved its ‘Summit 300’ target, 11 11 successfully securing employment for 300 Aboriginal people.

12

13

The Federal Government committed to building 14 a national VTEC network, based on Fortescue’s 14 model. VTECs Fresh Start was established. A unique prison-to-work program, Fresh Start aims to assist ex-offenders to gain skills, trade 15 qualifications and employment with Fortescue. The centres support 5,000 job opportunities for 16 Aboriginal people. 16

First all-female VTEC cohort graduates. The nine 17 female trainees from the South Hedland centre 17 begin their careers at Fortescue’s Christmas Creek and Solomon operations.

18 VTEC CONTINUES

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 VTEC celebrates ten years of creating opportunities

65 07 | Creating positive social change

797 29 22 Aboriginal people have VTECs established in Graduates through begun employment Australia, modelled on VTEC in FY18 through Fortescue’s VTEC Fortescue’s VTEC

Case Study Fortescue celebrates VTECs 10th anniversary of graduations

The tenth anniversary of graduations from Fortescue’s Since the initiative began a decade ago, 797 Aboriginal people pioneering Vocational Training and Employment Centre have begun employment with Fortescue, while a further 849 (VTEC) Program was celebrated at events across Fortescue’s Aboriginal people have received driver education and health sites in October 2017. Founder and Chairman Andrew and literacy support services from VTEC. Forrest AO, and Former CEO Nev Power, joined past and “I have always believed in the power of providing a hand up, present VTEC participants and members of the Port not a hand out and this is what VTEC is all about. By giving Hedland community to celebrate the milestone. Aboriginal people the chance to develop their skills and seize VTEC first opened in South Hedland Shopping Centre in 2006, the opportunities provided by VTEC, we are breaking the cycle based on a simple but compelling idea: after successfully of jobless training once and for all,” Mr Forrest said. completing training with Fortescue, you are guaranteed a job. The Federal Government adopted Fortescue’s VTEC model in In 2007, 20 Aboriginal people graduated from Fortescue’s VTEC 2014 and established 29 VTECs across Australia. after completing the first ever Aboriginal training program for rail track laying in the Pilbara and commenced full-time “It’s been incredibly humbling to see this simple, common employment with Fortescue. sense approach, which was born in the Pilbara, reach communities across the country and provide job opportunities for over 7,000 Aboriginal people,” Mr Forrest said.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Education and professional Career development LEAP is a 12-month formal training program development that includes off-site education, practical Fortescue implements four key education and support on-site development, internal mentoring, and professional development initiatives Building a supportive culture Aboriginal leadership education and which are available to Aboriginal people. Fundamental to the provision of meaningful business leadership training. employment is the ongoing development Each year, the launch of the program Up4It of Fortescue’s Aboriginal workforce through coincides with the Company’s Annual Fortescue has supported RoleModels training and professional development, General Meeting, giving LEAP participants Australia in the delivery of the Up4It and a workplace culture that understands, an opportunity to spend time with program for almost a decade. The program supports and champions Aboriginal Fortescue’s Board and to be inspired by the is designed to attract students back participation. most senior leaders in the business. To date, to school and reward those with good 38 Aboriginal people have participated in Fortescue has a range of programs which attendance in remote Pilbara communities. LEAP, with up to 12 candidates selected actively work to build a culture among the each year. Aboriginal Cadetship Program entire workforce that is openly supportive of Secondary school students are able to Aboriginal employment. Fortescue’s Trade Up access this program which provides Fortescue’s Trade Up is an award-winning This includes: mentoring, training and professional initiative that provides a pathway to an • Compulsory cultural inductions run by development opportunities. Cadets are apprenticeship for Aboriginal employees. local Aboriginal Traditional Custodians for offered direct entry to the Graduate Program Supported by Fortescue’s contracting all employees or Certificate II courses or the opportunity partners Thiess, Goodline and Eastern • Rewarding and recognising those people to apply for permanent employment upon Guruma Wirlu-Murra Yindjibarndi Joint 22 who are helping to close the gap by completion of their studies. Venture, there are currently 75 Aboriginal supporting Aboriginal development and people undertaking a traineeship or Graduate Program employing Aboriginal Development apprenticeship as a result of the program. Aboriginal secondary school or University Superintendents and Coordinators graduates are employed for two years where at each site to support Aboriginal Personal and family support they complete a structured program with employees Fortescue’s training and employment exposure to a range of departments across • The Company’s primary leadership programs are complemented by initiatives designed to overcome the barriers faced by Fortescue. development training is a three and a half day program. Half of one day is Aboriginal people in securing and maintaining Fortescue’s Vacation Student devoted to training leaders on managing work. Fortescue employs a full-time Aboriginal Program Aboriginal employees Health Coordinator and in 2018, the Aboriginal Aboriginal University students are • Fortescue celebrates significant Health Program commenced with a vision to supported in completing work experience proactively improve the health of Fortescue’s Aboriginal cultural events during the year, during their holidays. Three students were Aboriginal workforce. including NAIDOC Week enrolled in this program during FY18. • Fortescue is a member of the Jawun Fortescue is the only Pilbara-based mining Program in which Fortescue employees Company with flights in and out of all mine undertake secondments to remote sites to the major Pilbara communities of communities in the East Kimberley to Karratha, Port Hedland, Broome, Kununurra support Aboriginal organisations. and Fitzroy Crossing. This allows Aboriginal people to remain on country with their Supporting Aboriginal leaders families and access the employment Fortescue believes Aboriginal leaders are opportunities created by a remote mining essential to ensuring a culture that truly operation. supports Aboriginal people. The Company In FY18, all Pilbara-based employees were established the Leadership and Excellence eligible to receive housing support and in Aboriginal People (LEAP) Program in entitlements. Currently, 233 Aboriginal 2015 to support Aboriginal employees with employees are accessing Fortescue owned leadership aspirations. and leased properties. The Company spends over A$11 million annually on housing support for Aboriginal employees who reside in the Pilbara and its surrounds.

67 07 | Creating positive social change Addressing Aboriginal • Member and active participant in Fortescue continues to work with Aboriginal Association of Mining and Exploration corporations to address challenges facing disadvantage Companies (AMEC) Aboriginal Heritage Aboriginal communities and during FY18, Objective Affairs Committee continued to build on two key partnerships. • Membership and active participant in Increase engagement with governments, The Wirlu-murra Yindijibarndi Aboriginal Business Council of Australia’s Indigenous corporate Australia, non-government Corporation (WMYAC) and Fortescue Taskforce. CEO Elizabeth Gaines, sits on organisations and industry peers to address partnered with Big hART, a not-for-profit, this taskforce Aboriginal disadvantage. non-government organisation to deliver • Active participant in Supply Nation’s Target an Aboriginal youth workshop program to Leadership Round Table discussions Annual involvement in the policy debate to children living in Roebourne. The program • Vocational Training and Employment address Aboriginal disadvantage. uses art and media to lead social change Centre advisor. on issues including the prevention of Fortescue’s operations provide a unique Partnerships with Aboriginal family violence, connection to culture and opportunity to empower Aboriginal people corporations engagement in education. and help bring generational change. Objective In January 2017, Fortescue joined the Jawun As the industry leader in Aboriginal Empower Aboriginal corporations and Program and during FY18, five secondees engagement, employment and business develop partnerships to address key travelled to the East Kimberley region for six- development, Fortescue participates in a challenges facing communities, with a focus week placements. wide range of industry organisations and on education and young people. Jawun is a program focussed on building global bodies including: Target the capacity of Indigenous people by • Member and active participant in Annually, deliver at least two major placing skilled individuals from Australia’s Business Council of Australia’s Industry community projects with ILUA partners. leading companies and government Network agencies into Indigenous organisations. These secondees share their expertise and support Indigenous leaders to achieve development goals for the community.

Case Study Six weeks in the East Kimberley – the Jawun experience

Environmental Advisor Olivia Hertsted, participated in a six- The CDP supports job seekers in remote Australia to build skills, week secondment with East Kimberley Job Pathways, as part address barriers and contribute to their communities through a of Fortescue’s partnership with the Jawun Program. range of flexible activities. Olivia completed induction week which included regional Olivia helped the organisation to build capacity, achieve specific training to give an insight into the Miriwoong culture and business goals and develop its stakeholder, communications and then went onto her placement at East Kimberley Job Pathways engagement strategy. (EKJP), an organisation funded to deliver the federal Community Collaboration with leadership was critical and visiting some of the Development Program (CDP). remote communities allowed Olivia to meet with EKJP employees and engage with local stakeholders, including job seekers, and learn more about Indigenous people and their culture.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Building communities Fortescue recognises the need to build Fortescue seeks to empower its towns in the Pilbara into communities that communities by developing partnerships Objective will attract and retain a mining workforce to deliver strategic and meaningful To create economic opportunities in the and their families. The Company supports outcomes that generate value for regions in which Fortescue operates through a regional fly-in fly-out workforce from communities. engagement with local businesses, local Port Hedland, Broome, Fitzroy Crossing, Fortescue’s biannual Community Grant employment and the residential workforce. Kununurra and Karratha, with 524 employees Program has been operating for ten years based in the Pilbara, 457 of which receive Target and during standard rounds, continues to housing support. • Annually, achieve at least five per cent of provide eligible organisations with up to actual spend with local Pilbara suppliers During FY18, Fortescue conducted a A$5,000 in funding to support a variety • By the end of FY18, update the approach residential workforce survey to better of community initiatives that benefit the to local employment and Fortescue’s understand the challenges facing its Pilbara Pilbara. based workforce, and to ensure that the residential workforce. During FY18, Fortescue provided community investment strategy is aligned community grants totalling over A$150,000 In FY18, Fortescue spent over 98 per with community objectives and expectations. to 75 community, sporting and non-profit cent of its total contestable procurement The trends emerging from the survey were organisations in the Pilbara, delivering a spend within Australia – 67 per cent within shared and discussed with Local Government range of beneficial programs, activities and Western Australia and six per cent directly in representatives, to provide further insight. outcomes to the local community. the Pilbara. Community investment Fortescue focusses on community projects To ensure continued local expenditure, that embrace: Fortescue’s procurement teams will focus on Objective a number of projects in FY19. Ensure Fortescue’s community investment • Education and training program is strategic and delivers value to • Aboriginal engagement communities. • Health and wellness • Community safety and involvement Target • Economic development By the end of FY18, review and update the • Arts and culture community investment strategy. • Environmental responsibility.

Case Study Working with the Nyiyaparli Aboriginal Corporation

Fortescue actively creates sustainable opportunities for the Nyiyaparli people by supporting Karlka Developments (KD), the commercial arm of the Karlka Nyiyaparli Aboriginal Corporation.

Fortescue partners with KD on a number of joint ventures, KD Chair Natalie Parker, said Fortescue’s support had been including with Morris/Sodexo to run the Karntama Camp invaluable to the organisation and the Nyiyaparli People. at Christmas Creek. KD has recently acquired the national “Fortescue has helped us develop our business through industrial fencing company FenceWright, which was successful providing opportunities, employment and training for the in winning contracts from Fortescue on a commercial and younger generation, mentoring and capacity building. Our competitive basis. relationship is based on mutual respect and is highly valued by the Nyiyaparli People. We view Fortescue as family and they reciprocate that relationship,” she said.

69 07 | Creating positive social change

Case Study Fortescue celebrates 15 years with milestone grants

In 2018, Fortescue marks a range of milestones including the celebration of the Company’s 15th anniversary. In recognition of 15 years of working with community groups, a special milestone grant of up to A$10,000 was made available to eligible community projects within the council boundaries of the Town of Port Hedland, City of Karratha and Shires of Ashburton and East Pilbara.

CEO Elizabeth Gaines, said Fortescue’s strong connection with “We are proud of our contribution to the strength of the State local communities across the Pilbara reflected the strong sense and Australia’s national economy and the role we are playing of family which is at the core of the Company’s Values and in driving real economic and generational change in rural and culture. remote communities.”

“From the outset, it was Fortescue’s vision to ensure the The five recipients of the grants were announced in July 2018 communities in which we operate benefit from our growth and and will receive A$10,000 each. development,” Ms Gaines said.

Case Study Fortescue extends its support of rugby union in WA

Fortescue has a longstanding association with rugby union in Western Australia and in April 2018 became the Naming Rights Partner of the RugbyWA senior rugby competition for the next three seasons.

Fortescue Senior Rugby includes all senior men’s grades With the Fortescue Premier Grade continuing to provide a including the Fortescue Premier Grade and the Alcohol Think pathway to the Western Force, Fortescue’s sponsorship helps Again Women’s Premier Grade competition. The sponsorship to build a talent pool of players and supports the efforts of provides a huge boost to rugby in WA and is a further example community volunteers and sports people who contribute to of the Company’s commitment to ensure communities benefit their local communities through sport. from its growth and development.

“From the outset, it was Fortescue’s vision to ensure the communities in which we operate benefit from our growth and development.”

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Community The refuge provides crisis accommodation In FY18, Fortescue hosted the students at and holistic programs to women and children its Port Hedland port and rail operations partnerships escaping family and domestic violence. during work placement week in May and Port Hedland community Fortescue stands together with the refuge June. Students also joined Founder and Fortescue has a longstanding partnership and participates in annual White Ribbon Day Chairman Andrew Forrest AO, for the with the Town of Port Hedland. Since 2012, events, including the Port Hedland White maiden arrival of Fortescue’s Ore Carrier, the Company has provided A$2.65 million Ribbon march, in recognition of the need to FMG Sydney, into Port Hedland. to support the Wanangkura Stadium eliminate family violence in communities. Young Australian Art and Writer’s and contributed A$500,000 towards COO Greg Lilleyman, is a White Ribbon Awards: Pilbara Region the Hedland Skate Park. Fortescue also Ambassador and is committed to building In FY18, Fortescue continued its support continues to support community events greater equality and respect between of the Young Australian Art and Writers’ including the North West Festival. men and women, with Fortescue working Awards: Pilbara Region program which was Mingle Mob Program towards achieving White Ribbon Australia delivered to eight Pilbara schools, several Workplace Accreditation in 2019. Fortescue is proud to continue its support of which are remote community schools. of the Youth Involvement Council’s (YIC) Roebourne District High School The program aims to develop literacy, teach Mingle Mob Program in South Hedland. In August 2017, Fortescue held the annual creativity and increase school attendance Aimed at reducing antisocial and criminal Working Bee at Roebourne District High levels with a view to addressing the broader behaviour, Mingle Mob runs a bus that picks School. Fortescue employees, friends concern of child suicide rates in remote up at-risk youth off the streets and takes and community members volunteered communities. them to a safe shelter. their time to revitalise the school grounds Ronald McDonald House with painting, landscaping, repairs and Fortescue continues to build its strong Hedland Women’s Refuge maintenance, making the school a vibrant partnership with Ronald McDonald Fortescue believes it has a responsibility to and welcoming environment. The seventh demonstrate leadership on the important annual Working Bee will take place in House (RMH), which provides emergency issue of domestic and family violence in its September 2018. accommodation to regional families with workplaces and in the wider community. In children needing medical treatment in 2016, the Company entered into a five-year Hedland Senior High School’s Perth. In FY18, Fortescue maintained is partnership with the Hedland Women’s Trade Training Centre sponsorship of two rooms through the RMH Refuge which includes direct operational Fortescue continues to be an operational Adopt-A-Room program, in addition to funding and opportunities to assist through sponsor of the Hedland Senior High School’s employees making significant contributions activities such as the upgrade of the refuge’s Trade Training Centre, which provides through a variety of fundraising activities students with a pathway to employment outdoor recreation area. including participation in the annual Central in the mining industry and other industries Park Plunge. requiring trade qualified students.

Case Study Community BBQNational Trailer Indigenous Hockey Program In May 2018, Fortescue launched the new Fortescue The trailer is fully equipped with a slide-out BBQ, fold out Community BBQ Trailer. Constructed in partnership with fridges, TV screen, speaker system and storage space. Fortescue’s its supplier Shermac, the Fortescue Community BBQ Trailer commitment to community organisations includes providing is a free service available to eligible Port Hedland-based all BBQ ingredients and materials along with volunteers to community, non-profit and sporting organisations to assist coordinate the use of the trailer. with fundraising and community events. Fortescue understands the importance of fundraising activities, particularly in regional towns, and is proud to support the communities in which it operates.

71 07 | Creating positive social change

Case Study Fortescue says no to domestic and family violence

Fortescue is proud to stand with women and men across “As a business, employer and community member in the Pilbara, Australia in speaking out and acting against domestic and we have a responsibility to be a leader on important issues such family violence. as domestic and family violence,” Mr Lilleyman said.

Since 2015, the Company has supported White Ribbon Day “Safety and family are at the core of Fortescue’s Values and which challenges the community to have open and honest we encourage everyone to stand up and speak out. Our conversations about the effects of domestic and family violence commitment to zero harm extends beyond our operations to and encourages everyone to stand up, speak out and act to our local communities across the Pilbara.” prevent domestic violence against women. In 2016, Fortescue entered a five-year partnership with the Fortescue aspires to create a space where every member of the Hedland Women’s Refuge which included A$25,000 in funding Fortescue family is safe. and opportunities to assist the Refuge in a number of activities, including the upgrade of their outdoor facility. The Company believes that by fostering a safe workplace, championing the values of family and treating everyone with Building on this important work, Fortescue is now striving to respect, it can positively contribute to social change in our become a White Ribbon Australia Accredited Workplace. This community. is an important step in its commitment to ending domestic violence as the Company accepts its responsibility as an industry In November 2017, the Fortescue family participated in events leader on important issues such as family violence. across its operations in the Pilbara and local communities in a strong demonstration of support for White Ribbon Day. A steering committee has been established to provide leadership throughout the certification process which involves Led by Chief Operating Officer and White Ribbon Ambassador engaging with Fortescue’s people through surveys, policy Greg Lilleyman, team members in Port Hedland joined the local reviews, training and implementing a range of support community for the annual White Ribbon Day march, where a programs. record number of participants united to end the silence around domestic and family violence.

Case Study National Indigenous Hockey Program

Fortescue is the Naming Rights Partner of the Kookaburras The workshops develop hockey skills and demonstrate the and a supporting partner of the Hockeyroos, Australia’s importance of teamwork and a healthy lifestyle to school children. national hockey teams. Further to the school workshops, Fortescue and Hockey Australia In partnership with Hockey Australia, Fortescue delivers the support two Pilbara hockey associations, enabling children Pilbara Community Hockey Program to schools and local hockey and adults to experience hockey for the first time or develop a associations. In May 2018, members of the Kookaburras and pathway into professional hockey. The partnership also sees the Hockeyroos delivered hockey workshops to ten primary schools Kookaburras and Hockeyroos participate in community outreach and one high school in the Pilbara. events such as the Welcome to Hedland Expo, Roebourne Working Bee and Pilbara Colour Dash.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Respecting human Below these documents sit specific polices Fortescue works with its stakeholders to and guidelines that ensure the highest identify and understand the impacts of its rights standards are achieved across the business. activities, so that benefits can be optimised Objective and negative impacts limited. Due diligence Fortescue’s activities are undertaken in a Fortescue complies with global standards is implemented to prevent and mitigate manner consistent with the international on business and human rights and takes adverse impacts and the Company provides human rights principles encompassed in the: a leading role in the Australian business access to remedy this through effective community on human rights. • United Nations Universal Declaration of grievance mechanisms. Human Rights Potential human rights risks are identified Target • International Labor Organisation’s and assessed within Fortescue’s corporate- • By mid FY19, complete a human rights Declaration on the Fundamental wide risk management framework. This assessment across the business Principles and Rights at Work framework supports proper consideration • Annual, active engagement on human • United Nations Global Compact of all potential human rights risks by rights issues in business. • United Nations Guiding Principles on senior management and the Board. Business and Human Rights. Appropriate risk management strategies Fortescue recognises the importance of are implemented and monitored protecting human rights and is committed The Company also works to ensure it is on a regular basis. The Audit & Risk to protecting the rights of all people not complicit in human rights abuses Management Committee (ARMC) is including its employees, the communities committed by others. in which the Company operates, those specifically responsible for oversight of risk Fortescue recognises the significant role it who may be impacted by its activities, management (including human rights risk) has to ensure that the rights of Indigenous its customers, and those within its on behalf of the Board. people are protected in the communities supply chains. During FY18, Fortescue undertook a in which it operates. The Company Human Rights assessment to identify key The foundation documents for human acknowledges the UN Declaration on rights protection are the Company’s Code human rights issues, risks and impacts of its the Rights of Indigenous Peoples and of Conduct and Integrity and Human Rights activities across all operations. Key issues the human rights principles it embodies Policy. These documents outline Fortescue’s identified included protecting the health including the principle of Free, Prior and approach to establishing the essential and safety of employees and contractors, standards of personal and corporate Informed Consent (FPIC). Consistent with addressing modern slavery in the supply conduct and the behaviour expected of FPIC, Fortescue’s engagement processes chain and protecting the rights of everyone who works for or with Fortescue seek to secure the consent of traditional Indigenous people and communities near including directors, employees, contractors, Indigenous land owners to conduct mineral its operations. The Company is working to suppliers and business partners. exploration and development on their implement the improvement opportunities traditional lands. identified during this assessment.

Fortescue has been an avid supporter of the introduction of an Australian Modern Slavery Act.

73 07 | Creating positive social change

Eradicating modern slavery The statutory declaration has been an Fortescue continued to collaborate with Opportunity important tool in raising the profile of government, its peers and bodies including Contribute to the end of modern slavery modern slavery in the Company’s supply the Walk Free Foundation, and in May by identifying and addressing all forms of chain. As part of Fortescue’s international 2018, Fortescue convened an information forced labour and human rights abuses in expansion, Fortescue’s Code of Conduct and session, attended by over 30 of its key Fortescue’s business and supply chain. Integrity, which incorporates Fortescue’s suppliers and peers, on recruitment and the commitment to eradicating modern slavery, pending Modern Slavery Act with a guest One of the potential major human rights is incorporated into the Company’s South speaker from the Institute of Human Rights risks facing Fortescue is the existence of American supplier vendor packs. and Business. Fortescue was also an active modern slavery practices in its supply chain. Due diligence participant in the Global Compact Network Australia’s Modern Slavery Community of This reflects the fact that Fortescue has a Fortescue’s supplier due diligence process Practice. global supply chain that procures a range requires supplier compliance with the of goods and services from many countries Company’s Code of Conduct and Integrity Andrew Forrest AO has been a long-time around the world. Modern slavery has the and Fortescue’s policies and standards on advocate for the eradication of modern potential to exist in Fortescue’s supply chain human rights, ethical, environmental, health slavery throughout the world. through a variety of circumstances including and safety matters. The process also aims Fortescue has been an avid supporter of forced labour, child labour, debt bondage, to identify risks and ensure that adequate the introduction of an Australian Modern human trafficking, abuse of requirements for mechanisms are in place to mitigate and Slavery Act and is committed to sharing a minimum living wage and discriminatory manage them. employment practices. its learnings and expertise with others. The due diligence process is initiated by During the year, Fortescue participated Consistent with the Company’s risk performing a risk assessment of suppliers in multiple discussions on the pending management approach to human rights prior to onboarding or contract award. The federal legislation including a roundtable more generally, the risk of modern slavery in risk assessment is performed using specialist consultation session between business and Fortescue’s supply chain is assessed within vendor risk software which undertakes a the Attorney-General’s department on the Fortescue’s corporate-wide risk management number of assessments including checking proposed reporting requirements of the Act framework and the ARMC is responsible the supplier, its directors and related in October 2017. for providing oversight on behalf of the companies against a suite of international Fortescue has expanded the application Board. Given the nature of this risk, the key databases (including government databases) of the risk software beyond suppliers to focus of senior management is working for human rights violations. Once the supplier business counterparties. This approach collaboratively with Fortescue’s suppliers has passed the initial risk assessment and enables the Company to work with business to ensure that Fortescue’s expectations and is subsequently onboarded, this software counterparties to eradicate modern slavery. standards are understood and the potential continuously monitors the supplier over Fortescue also undertakes in-country risk exposure to human rights risks is minimised. the term of their contract. Any potential assessments before investing in a particular issues are escalated for senior management Fortescue’s suppliers country to ensure the level of human rights consideration. Fortescue is committed to working with its risk, including the risk of modern slavery is suppliers to eradicate modern slavery from Fortescue has a number of mechanisms for well understood. the Company’s supply chain. Fortescue employees and third parties to anonymously procures products and services from a broad report suspected or actual illegal activity or Looking forward range of industries including energy, fixed breaches of Company Policy, including the The following priorities have been set for plant and commodities, mobile fleet and Company’s Code of Conduct and Integrity FY19: information technology. and Human Rights Policy. Employees Policy review In FY18, 1,809 suppliers were engaged and third parties are able to access an Review the current policy framework to with a total contestable spend of A$3,361 externally operated Whistleblower system ensure it meets best practice. through an online portal, phone or email. million (GST inclusive). Over 98 per cent of Training Each Whistleblower disclosure received is Fortescue’s total contestable procurement Deliver modern slavery training to all spend was within Australia including a investigated and reported to the executive. The instances and outcomes of the procurement staff to increase capability and considerable proportion within Western ensure they are able to assist suppliers in Australia and the Pilbara region. Whistleblower investigations are reported to the Audit & Risk Committee. building their capabilities. All suppliers are required to comply with the Engagement Code of Conduct and Integrity and Human FY18 performance Engage with suppliers to ensure they Rights Policy. The Company’s standard During FY18, potential suppliers were understand their requirements and terms and conditions also impose minimum assessed using risk assessment software prior assist them through the process to build standards relating to ethical business to contract award. Of those assessed, no capabilities. new suppliers onboarded were identified as practices, safety and environment. These Collaboration having a human rights violation. documents outline clear requirements on Continue to work with the Walk Free forced labour and slavery within supply During FY18, Fortescue established an Foundation and other organisations and chains. Fortescue also asks that suppliers in-house Anti-Slavery Working Group and businesses to share learnings and build sign a statutory declaration (or equivalent), developed a modern slavery training capabilities. representing an additional commitment program for its procurement team. Assurance to work with Fortescue to eradicate slavery Review the current assurance process to from their organisation and supply chain. ensure it meets best practice. Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 08 Fortescue’s response to climate change

75 08 | Fortescue’s response to climate change

Since FY15, GHG emissions intensity across Fortescue’s operations has reduced by 13.5 per cent.

Fortescue’s commitment as assessed by the Intergovernmental Panel Fortescue acknowledges the growing Climate change is one of the most on Climate Change (IPCC) and supports stakeholder interest in business action challenging and complex issues facing the Paris Agreement goal of limiting global on climate change and this year has the planet. Developing solutions to the temperature rise to less than 2oC above commenced the process to expand issues that arise will require a long-term, pre-industrial levels. disclosure in line with the recent recommendations of the Task Force on sustainable, collaborative approach where The Company’s climate change strategy Climate-related Financial Disclosures (TCFD) Governments, businesses and communities focusses on mitigating the risks and established by the G20 Financial Stability work together. building the resilience of the business and, Board. The TCFD recommendations focus on As a business which strives to create value where possible, creating and leveraging the four key elements depicted below. for its shareholders and communities, opportunities. Fortescue will continue Fortescue is committed to playing its part to work proactively with its peers and and contributing to global efforts to combat governments to ensure policy frameworks climate change. are suitably designed to deliver positive climate change outcomes while also Fortescue accepts the scientific consensus supporting economic growth. TCFD recommendations

Governance Strategy Risk management Metrics and targets

Disclose the organsation’s Disclose the actual and Disclose how the organisation Disclose the metrics and targets governance around climate- potential impacts of climate- identifies, assesses, and used to assess and manage related risks and opportunities. related risks and opportunities manages, climate-related risks. relevant climate-related risks on the organisation’s and opportunities where such businesses, strategy, and information is material. financial planning where such information is material.

Source: Recommendations of the Task Force on Climate–related Financial Disclosures 2017.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Fortescue will work to progressively improve CCC has responsibility for coordinating the outcomes by incentivising innovation and the quality of climate change disclosure that assessment of climate change and critically supporting economic stability and growth. aligns with the TCFD recommendations. evaluating risk management strategies. The The Company understands that a climate This reflects the rapidly evolving nature of CCC reports to the CLT and to the ARMC and change policy presents both risks and its business and the significant ongoing Board as appropriate on specific issues. opportunities to the business and will work to implement effective strategies to ensure the responsiveness of its business reduce emissions. Fortescue will continue Strategy plans to these changes. This responsiveness to build on this approach over the next Fortescue recognises its responsibility to was demonstrated by the redevelopment 12 months. Each year, the Company will support global efforts to reduce greenhouse of Fortescue’s GHG Emissions and report its performance and progress against gas (GHG) emissions and to manage the risks Energy Strategy and a Carbon Acquittal the strategy in line with the structure and impacts associated with climate change. Management Plan led by the Energy Group. Fortescue has developed a climate change recommended by the TCFD on page 76. Over the next 12 months, Fortescue will strategy to ensure the Company manages review and further develop environmental its economic growth in an environmentally Governance metrics to assist in the evaluation of Good corporate governance is critical sustainable manner. performance in managing relevant climate- to the long-term, sustainable success of The Company’s climate change strategy related risk and opportunities. Fortescue. It contributes to value creation focusses on four key elements: and positive outcomes for all stakeholders. Reducing emissions Good governance is embedded throughout • Building resilience to protect assets and To manage risks associated with emissions Fortescue and is the collective responsibility operations from the impacts of climate mitigation policy frameworks, Fortescue of the Board and all levels of management. change is committed to reducing the emissions intensity of its operations. To support and Fortescue seeks to adopt leading practice, • Reducing emissions intensity of its encourage this, Fortescue: contemporary governance standards and operations apply these in a manner consistent with its • Maximising opportunities from regulatory • Has developed an Energy Strategy to culture and Values. Fortescue’s approach to changes and market developments ensure that its operations are supplied with a cost effective, secure and constant corporate governance is explained more • Continuing customer engagement to power supply that is also able to reduce fully in the FY18 Corporate Governance ensure its products meet customer emissions intensity through investment in Statement, available at www.fmgl.com.au requirements. low emissions energy sources, including Governance of climate change related The implementation of this strategy is driven renewables matters, including risks and opportunities, by the CCC with input from all levels of • Applies a price on carbon for new operates within this overall governance management. A climate change risk greenfields sites when assessing power framework. Fortescue’s Board has ultimate assessment has also been undertaken which supply options, and potential energy infrastructure projects which could responsibility for the oversight and approval highlights the risk and opportunities enhance its business of all risk management and financial associated with the strategy. The Board and • Set the following two short-term emission investment decisions, including those the ARMC provide oversight of the strategy intensity targets in FY18: relating to climate change. The Board and and related risk management activities. o By FY20, achieve a 25 per cent decrease the Audit & Risk Management Committee Building resilience in emissions intensity in electricity (ARMC) specifically are responsible for the To protect assets and operations from the generation from FY15 levels consideration of climate change related risks physical risks of climate change, including o By FY20, achieve a five per cent decrease and Fortescue’s related risk management the predicted increasing intensity of extreme in emissions intensity in energy strategies. The Board regularly consider weather events in the Pilbara, the Company consumption in the production process how climate change may drive changes to factors identified risks into project designs from FY17 levels Fortescue’s physical, regulatory, commercial, and annual business forecasts. Site specific • Continue to investigate opportunities to and operating environments to inform the designs are created for each project and are reduce emissions in every day operations. development of the Company’s medium-to- routinely reassessed to ensure continuous During FY19, Fortescue will expand the longer-term goals and strategies. improvement in operational resilience in the application of internal carbon pricing and Senior management structures have short, medium and longer-term. develop medium-term targets, and long- term emission goals. also been strengthened to support more Fortescue will also work with the effective governance on climate change. communities in which it operates, its peers Maximising opportunities During FY18, a dedicated executive Climate and government to ensure that these Fortescue will continue to actively assess Change Committee (CCC) was established. communities understand and are prepared opportunities to diversify and grow its The CCC is chaired by Chief Operating for the potential impacts of climate change. portfolio as the world transitions to a Officer Greg Lilleyman, and includes a There is a rapidly changing regulatory net-zero emissions global economy. This range of senior executives from across the landscape within Australia and internationally includes increasing exposure to base metals Company. The role of the CCC is to monitor and Fortescue will continue to work with its where demand is expected to increase. The and coordinate Fortescue’s overall response peers, industry groups, governments and the Company is currently undertaking low cost, to climate change and to ensure risks and community to ensure the development of early stage, exploration and evaluation work opportunities are considered from a whole an effective policy and regulatory framework for a range of commodities including copper of business perspective. Specifically, the that enables the transition to lower emission and lithium. 77 08 | Fortescue’s response to climate change

Customer engagement Fortescue’s medium-term strategy of Key climate related risks and Fortescue will continue to work with its producing ore with an average iron content opportunities customers to ensure its products meet their above 60 per cent Fe is aimed at creating a Fortescue has considered the actual and requirements and will continuously fine tune product range to enhance customer offering. its product strategy to maximise value in use. potential risks and opportunities to the In FY18, climate change risks and business strategy. As emission reduction frameworks opportunities were subject to executive- evolve, Fortescue will work to ensure the level review and validation. The most environmental performance of its products material risks and opportunities to the exceeds or equals that of other iron ore business identified by the executive-level products and will look at opportunities review and validation process are presented to engage with new customers, as these in the table below. frameworks drive market changes.

Risk Risk detail Mitigation and opportunities Regulatory Fortescue is subject to both Australian and overseas Fortescue will continue to work with industry bodies, developments regulatory frameworks associated with GHG emissions. It its peers, the government and the community to impacting is expected that these frameworks and associated market ensure that an effective regulatory framework that operating costs mechanisms will evolve in the coming years. This will enables the transition to lower emission outcomes by place an increased compliance and reporting burden on incentivising innovation and supporting economic Fortescue and could drive increased operational costs stability and growth is implemented associated with: The Company is also focussed on continuing to • Revision of current emissions regulations, reduce its CO2 emissions and has set voluntary apportioning the emissions reduction contribution short term targets for its operations. During FY19, between various sectors of the economy to meet medium-term targets and long-term emission goals Australia’s 2030 national emissions reductions target will be developed (or ‘nationally determined contribution’) or • Potential revision of Australia’s 2030 nationally Fortescue’s Energy Strategy ensures that the use of determined contribution due to political gas and renewable energy sources are considered developments during the development and replacement of power stations. The strategy specifically focusses on opportunities to gain commercial and emissions benefits from investment in renewable sources. Investment in renewables and alternative fuel technology may also improve energy security and reduce energy costs

Fortescue applies a price on carbon for new greenfield sites when assessing power supply options to ensure future policy changes are accounted for and that a cost of carbon is appropriately integrated into business planning. During FY19, Fortescue will expand the application of internal carbon pricing

Emission reductions The International Maritime Organisation (IMO) has Fortescue is working with The Australian Maritime in the shipping adopted regulations to reduce the total annual GHG Safety Authority (AMSA), the IMO, its peers and the industry emissions from international shipping by at least 50% ship owning community to develop initiatives to meet by 2050 (compared to 2008), whilst also pursuing efforts these targets towards phasing them out entirely. This poses a range of challenges for Fortescue in relation to the fleet of vessels employed to deliver products to customers

Potential risks include: • Disruption to the capacity and availability of vessels • Increased shipping costs

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Risk Risk detail Mitigation and opportunities Regulatory Reduced market demand for Fortescue’s products if Fortescue will continue to engage with customers non-market based climate change regulations impact developments As emission reduction frameworks evolve, Fortescue directly on the steel manufacturing sector and result impacting will ensure the environmental performance of its in market changes. Notably, China launched a market- customers and products exceeds or equals that of other iron ore based emissions trading scheme in 2017, although initial market demand products and will look at opportunities to engage with coverage extends to power sector emissions only, it is new customers, as these frameworks drive market expected to be expanded progressively over the next 5 changes years Fortescue’s medium-term strategy of producing ore with an average iron content above 60% Fe is aimed at creating a product range that continues to be valued by the market and supports customer needs The Company is also assessing diversification options to increase business exposure to base metals where demand is expected to increase in a global economy transitioning towards net-zero emissions and is undertaking low cost, early stage, exploration and evaluation work of commodities such as copper and lithium

Operational Increased severity of extreme weather events causing Fortescue’s Climate Change Strategy focusses on interruptions material damage to assets and infrastructure through building resilience into its operations to protect assets winds, flooding and tidal surge and minimise operational downtime Changes in rainfall intensity and frequency have the potential to increase the duration and frequency of The Company has constructed its port, rail and mine downtime at operating sites. Increased severity of infrastructure to meet the highest specifications cyclones may lead to increased closures at the Herb Elliott accounting for the risk of extreme weather events. Port facility, impact on the volume of product shipped, All new projects assess and develop management and cause damage to assets and infrastructure and mitigation mechanisms to address the potential These impacts may lead to increased cost and reduced physical impacts of climate change revenue associated with: Fortescue’s water strategy is focussed on increasing • Disruptions to operations impacting production rates • Increased operational costs as a result of: the resilience of its operations by reducing water o Damage to property and assets usage requirements of operations. This involves a focus o Increased maintenance on innovation and technological solutions, and the o Increased insurance premiums implementation of metrics and internal performance There is an increased likelihood of climate change- standards to proactively manage risks associated with driven prolonged drought events in the Pilbara region water scarcity which will place increasing stress on the availability Fortescue will continue to work with government of water resources, particularly the balance between and the community to reduce the risk of longer environmental sustainability and business/public use. approval times and unnecessary regulation that may Fortescue’s operations require process water and are currently dependent on groundwater sources. Water not appropriately balance environmental, social and scarcity issues may lead to reduced revenue associated economic needs with: Fortescue will continue to work with the Port Hedland • Inadequate water supply impacting on operations Port Authority and other operators to minimise • Longer environmental approvals processes and delays impacts to ship movements during extreme weather to mining schedules impacting on operations events • Increased operational costs due to additional environmental studies Rising sea levels also have the potential to impact on the Herb Elliott Port facility. These impacts may lead to reduced revenue associated with: • Disruptions to operations impacting production rates • Increased operational costs as a result of: o Damage to property and assets o Increased maintenance o Increased insurance premiums o Installation of new, more resilient infrastructure

79 08 | Fortescue’s response to climate change

Fortescue’s medium and long-term FY18 performance Key initiatives that drove GHG and energy financial planning is based on the overall In FY17, Fortescue set itself two short term intensity reductions during FY18 include: business strategy and an understanding targets to reduce its GHG emissions intensity. • Improved strip ratios across all mine sites of the risks and opportunities associated Objective • Improved ore recovery from wet plant with that strategy. Financial planning also operations considers a range of market, operational • Reduce carbon emissions across the • Reduction in Pilbara powerplant natural and regulatory scenarios and models these business. gas usage by Fortescue’s Port operations to evaluate potential financial outcomes. Target • Roll out of the Autonomous Haulage System Fortescue’s Board and management is • By FY20, achieve a 25 per cent decrease (AHS) at the Christmas Creek minesite. The focussed on improving this modelling in emissions intensity in electricity remaining truck fleet will be progressively capability to ensure that the organisation is generation from FY15 levels converted resilient to changes in the external business • By FY20, achieve a five per cent decrease • Installation of Variable Speed Drives (VSDs) environment. Modelling of climate change in emissions intensity in energy to control bores, to decrease electricity scenarios and the impact on business consumption in the production process requirements strategy is an area that is still in the early from FY17 levels. • Completion of stage 1 commissioning of the stages of maturity. This will evolve over the relocatable conveyor at . coming years and see greater application Fortescue’s operations and approach to GHG of internal carbon pricing within financial emissions is compliant with: Key initiatives being progressed or investigated to further reduce emissions scenario modelling. • Australian Federal Government National include: Greenhouse and Energy Reporting Act 2007, Risk management • Replacement of Cloudbreak and The evaluation of climate change risks and and associated guidelines • Carbon Disclosure Project. Christmas Creek minesite power opportunities is integrated into Fortescue’s • Expanded use of relocatable conveyor Company-wide risk management process. While production has remained steady, systems to reduce fleet emissions Fortescue’s Risk Management Framework Fortescue has continued to reduce the total • Gas substitution technology for large (FRMF) ensures a consistent approach to the scope one and scope two GHG emissions. diesel engines. recognition, measurement, and evaluation In FY18, the Company emitted 1.68 million of all risks and opportunities, including tonnes of CO2e*, a reduction of 2.3 per cent Summary climate change. compared to the previous 12 months, and a Fortescue has aligned its FY18 climate change reporting to the TCFD recommendations Fortescue has a well-developed process reduction of 12.8 per cent since FY15. and is committed to maintaining open and for the identification, assessment, and Since FY15, GHG emissions intensity across transparent dialogue with stakeholders. management of risk. Primary responsibility operations has reduced by 13.5 per cent Fortescue will implement the following key for this process lies with management, and since FY15, the emissions intensity in actions: with oversight provided by the ARMC electricity generation has reduced by and the Board. Regular reporting is 13 per cent. • Expand the application of internal carbon pricing in FY19 provided to the ARMC on management’s Emissions intensity in energy consumption assessment of climate changerelated risks • Undertake structured scenario planning during FY18 was 348.9 t CO2e/mt.km, a in FY19 and opportunities. The CCC also plays an reduction of 3.7 per cent since FY17. important role in coordinating and collating • Develop medium-term targets, and long- The increase in FY18 emissions intensity in risk information across the business and term emission goals in FY19 electricity generation compared to FY17, is for oversight of specific risk management • Review and further develop thought to be a result of inefficiencies of the actions. The key climate change risks environmental metrics. OPFs at Cloudbreak and Christmas Creek and opportunities have been described which have since been addressed. on previous pages including related risk management strategies.

Total GHG emissions GHG emissions intensity Emissions intensity in electricity generation 2,000 4.5 2,000,000

1,500 3.5 1,500,000

e 1,000 2.5 1,000,000 railed and shipped railed and shipped 2 of CO Tonnes

e / million tonnes of material mined, processed, processed, mined, of material e / million tonnes 500 processed, mined, of material e / million tonnes 1.5 500,000 2 of CO Tonnes 2 of CO Tonnes

14-15 15-16 16-17 17-18 13-14 14-15 15-16 16-17 17-18 FY15 FY16 FY17 FY18 13-14 Scope 1 Scope 2 Scope 1 Scope 2

*For the purpose of this report, emissions from the Solomon power station are captured as Scope 1 only. This facility is now owned and operated by a subsidiary of Fortescue.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 09 Safeguarding the environment

Protection for future generations

81 09 | Safeguarding the environment Fortescue is committed to safeguarding the environment by protecting biodiversity, managing water resources responsibly, reducing greenhouse gas emissions and managing waste.

Protecting biodiversity stakeholders including government and other researchers. During FY18, the agencies, Traditional Custodians and the Company contributed funds to a number of Objective general community to ensure appropriate research, study and monitoring programs to To take responsibility for Fortescue’s management practices are in place to improve the knowledge and management disturbance by protecting biodiversity in minimise and mitigate these impacts. of rare and threatened fauna species the regions where the Company operates. including the Pilbara Leaf-nosed Bat, the Fortescue’s Environmental Policy and Pilbara Olive Python, the and Environmental Management System Target the Northern Quoll. • Achieve a net positive impact on (EMS) reflect the Company’s commitment biodiversity. to continually improve environmental Over the past five years, Fortescue has performance and provides a robust provided over A$4 million to conservation Fortescue is committed to safeguarding the framework for the identification and funds or on-ground research, land environment for future generations through management of environmental impacts. management and offset programs. responsible environmental management. The EMS aligns with ICMM, UNGC principles Fortescue employs internal and external The Company takes a precautionary and the requirements of ISO14001:2016 biodiversity experts to survey, monitor and approach to environmental matters and International Standard for Environmental provide advice on biodiversity protection. continues to invest in initiatives and Management Systems. Outcomes of this work are integrated into technologies to minimise environmental business planning processes, management Fortescue invests in initiatives and impacts. plans and procedures. technologies to contribute to the body Fortescue is committed to preserving the of environmental knowledge of the Monitoring methods adopted are in biodiversity of the areas where it operates, Pilbara and continues to support ongoing accordance with Fortescue’s Conservation understanding the potential impacts of relationships with government, universities Significant Fauna Management Plan (FMP) its operations and working closely with

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18

and are aligned with the Department of Fortescue’s mining or rail operations. For During FY18, numerous field and desktop Biodiversity Conservation and Attractions example, in August 2017, female Northern audits were undertaken by the Western methods. Quolls, with signs of reproduction were Australian Department of Water and recorded within the Solomon Hub. Environmental Regulation, Department The primary objectives of the FMP are of Mines, Industry Regulation and Safety to identify impacts, conserve significant All of Fortescue’s mine sites and associated and the Commonwealth Department of fauna species and develop management rail and port operations must adhere to the the Environment and Energy. The audits and monitoring measures that maximise FMP. assessed compliance against Ministerial the ongoing protection, and long-term The Company investigates all incidents and Statements issued under the Environmental conservation, of these species within, and implements improvement controls to limit Protection Act 1986 (WA), Mining Proposals adjacent to Fortescue controlled sites. A similar incidents occurring in the future. under the Mining Act 1986 (WA) and similar focus is applied to understanding During FY18, there were no significant Controlled Action approvals under the inland aquatic features adjacent to its environmental incidents or significant Environment Protection and Biodiversity operations. fines/sanctions against Fortescue and no Conservation Act 1999 (Commonwealth). environmental impact grievances filed. Conservation significant fauna monitored All audits determined Fortescue has in accordance with the FMP include Pilbara Compliance with all relevant environmental demonstrated a high level of compliance Olive Python, Northern Quoll, Bilby, Ghost laws and obligations is the absolute and that its operations are aligned with the Bat, Pilbara Leaf-nosed Bat and various minimum standard to which Fortescue expectations of government stakeholders. Migratory Birds. Monitoring to date has operates. Internal compliance auditing determined that conservation significant against environmental obligations occurs fauna continue to reside in habitats at all sites on a continuous basis. These surrounding Fortescue’s operations, and internal audits are supplemented with have not been significantly impacted by independent external audits. 83 09 | Safeguarding the environment

Case Study Partnership with WA Parks Foundation

In March 2018, the WA Parks Foundation and Fortescue announced a new partnership to inspire and help people from all backgrounds to connect back with nature.

Former Governor of Western Australia and Chair of the WA Parks “Fortescue is committed to safeguarding the environment and Foundation, Her Excellency the Honourable Kerry Sanderson AC protecting biodiversity for future generations to ensure that all said just being in nature has many benefits and we can all gain of the communities we work with benefit from our growth and both physically and mentally from connecting with our natural development. Initiatives such as this long-term investment in the environment. WA Parks Foundation will help better connect the community to the 31 million hectares of conservation estate here in WA,” he “In partnering with Fortescue, we are able to increase awareness said. about our unique natural environment and provide information to help people enjoy and appreciate parks, now and into the Her Excellency added, “Uniting the community through a shared future,” Her Excellency said. love for our WA parks helps to protect and conserve them for our physical and mental health.” COO Greg Lilleyman, said that encouraging participation and creating a sense of involvement are fundamental to building strong and vibrant communities.

Case Study Feral Cat A northern quoll is identified as a non-target control trial animal by the Felixer.

Fortescue has teamed up with the Department of Biodiversity, Conservation and Attractions and Holdings Pty Ltd to trial the Felixer, a device developed by Ecological Horizons, which offers a potential solution to the nation’s feral cat problem.

Devices are placed in locations where feral cats pose a threat to Three devices have been deployed for a two‐year research native animals. The Felixer identifies feral cats and foxes by their period. Initially, each Felixer will be used in photo‐only mode unique shape and instantaneously administers a target‐specific to study its efficacy at identifying cats and foxes. If proven poison onto their fur. This approach takes advantage of the fact successful, the active mode will be employed, and a measured that feral cats are compulsive groomers and will ingest the toxin dose of ‘1080 poison’ will be sprayed onto target species. when grooming. Fortescue currently invests in other feral animal control programs in the Pilbara, including trapping and baiting programs.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Case Study Subterranean fauna

The Pilbara region is recognised as one of the richest regions During FY18, Fortescue commissioned a subterranean fauna in the world for subterranean fauna where approximately survey of the Eliwana mine development area to supplement 3,000 species are believed to exist.* Subterranean fauna are significant historical survey effort in the region. This regional fauna which live their entire lives below the surface. understanding of subterranean fauna biodiversity is a critical component of Fortescue’s project assessment and Fortescue is committed to protecting the biodiversity and management processes. ecological integrity of these species and since 2009 has undertaken 17 surveys. Survey methods involve net hauling, trap setting and opportunistic sampling through leaf litter and soil. Once samples are collected, extensive laboratory-based taxonomy occurs to identify species. DNA analysis is also often undertaken to confirm species’ identification.

Results of these surveys provide valuable regional data on at least 150 stygofauna and 127 troglofauna species.

*(Halse 2018. Subterranean fauna of the arid zone. In Lambers, H (ed) On the Photo supplied by Bennelongia Environmental Consultants Ecology of Australia’s Arid Zone. Springer Nature)

Case Study Fortescue Marsh

The Cloudbreak and sites lie north of the Fortescue Marsh, a wetland of national significance listed on the Directory of Important Wetlands of Australia.

Fortescue implements a number of mitigation and management As part of a long-term strategic collaboration with the measures to protect the marsh including: Department of Biodiversity, Conservation and Attractions, • Minimising clearing and access to the Marsh Fortescue has provided over A$2.5 million to fund biodiversity • Strict adherence to surface and groundwater management protection programs at the Marsh. This includes the implementation of feral cat baiting and feral herbivore control programs programs and the funding of a dedicated Fortescue Marsh • The innovative Papa Waringka Managed Aquifer Recharge Conservation Officer, employed through the Department. (MAR) Program.

85 09 | Safeguarding the environment

Managing water licensing requirements set by industry Fortescue monitors groundwater and surface regulators. water conditions, local ecosystem and habitat responsibly health to ensure that its operations do not Dewatering and other mining related water significantly impact on the quantity or Objective uses accounts for the majority of water quality of natural water systems and natural Use water responsibly by improving water abstracted and Fortescue uses lower quality environments. Monitoring has consistently use efficiency and maximising the value of water and recycled waste water wherever shown that Fortescue’s abstraction activities existing water sources. possible to limit abstraction. The Company have not had a significant impact on Pilbara continually assesses and manages water natural water sources or water dependant Target resources by applying adaptive responses ecosystems. • Annual improvement in water use to water excess, water scarcity, water quality efficiency and waste water treatment. Fortescue’s evaluation of water related risks and opportunities, including those related to • By the end of FY18, complete Fortescue requires good quality, fresh water climate change, are integrated into multi- investigations into alternative water as a potable supply at its facilities. The supply disciplinary Company-wide risk management disposal options. of potable water is vital to Fortescue’s mine processes and are considered as part of sites as they are located in remote regions the Company’s overall business strategy. The effective management of water with no municipal supply. resources is fundamental to the sustainability Facility level risk assessments are undertaken of Fortescue’s operations, the environment Each operation is guided by site-specific regularly as part of mine planning and the communities in which the business Groundwater Management Plans, informed processes which consider operational operates. Fortescue takes a proactive by the Department of Water 2013 Strategic and environmental risks, constraints and approach to responsible water management Policy 2.09, which recommends a challenges. and as a minimum complies with water hierarchical approach for the use of mine dewatering surplus.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 The effective management of water resources is fundamental to the sustainability of Fortescue’s operations, the environment and the communities within which the business operates.

Some of Fortescue’s mining operations Under the MAR, 91.7 million kL of water Fortescue has gained considerable expertise are located near sensitive and ‘water- was directly reinjected into aquifers to in monitoring groundwater systems and is related’ receptors including permanent, minimise environmental impacts and committed to working with government, groundwater fed pools at the Solomon maintain water balance. industry and the community to share its Hub and the Fortescue Marsh, a wetland learnings and work with others to gain Fortescue investigates alternative water of national significance adjacent to the a better understanding of the Pilbara management options to mitigate its Chichester Hub. Fortescue is subject to hydrogeological systems. impact on the environment on an ongoing a number of environmental protection basis. At the Chichester Hub, options are During FY18, the hydrogeological model obligations, as well as voluntary monitoring being assessed to reinject surplus brackish for the Chichester operations was updated programs to minimise impacts to these water into unused infrastructure, such as and presented to regulators. The model ecosystems. abstraction bores and inactive mining pits, to was also expanded to include the Eliwana The Papa Waringka Managed enable future reuse. project and extensive hydrogeological Aquifer Recharge Program studies were conducted in the area Fortescue implements the Papa Waringka Regional between the Solomon Hub and the Managed Aquifer Recharge (MAR) Program hydrogeology proposed Eliwana project. at the Chichester Hub to ensure operations Over the next 12 months, the Company Objective have access to an efficient and resilient will continue developing a conceptual Lead a better understanding of regional groundwater supply, without damaging understanding of the Pilbara hydrogeology hydrogeological systems where the or depleting the natural aquifers and which will assist in developing the scope of Company operates. ecosystems that rely upon them. During the project with the report being published FY18, 127 million kL of groundwater was Target prior to 30 June 2021. abstracted to allow mining below the water By FY21, complete and publish findings of a table, for a potable water supply and non- Pilbara wide hydrogeological systems study. dewatering abstraction for mine use. 87 09 | Safeguarding the environment Mine closure The new stepped landform design is Reducing waste also expected to be cheaper and easier Objective Objective to implement and maintain than the To reduce waste generation through Ensure mine closure is considered in all industry’s standard closure design prevention, reduction, recycling and reuse. aspects of planning and operations. • Development and approval of the Solomon Hub Frederick deposit mine Target Target closure plan by the Department of • By mid FY18, develop and communicate • By mid FY18, develop a product lifecycle Mines, Industry Regulation and Safety. and waste disposal procurement policy, a whole of business closure standard Development and submission of the excluding off-the-road tyres (OTRs) Nullagine mine, Eliwana mine and • By mid FY18, establish a closure steering • By the end of FY18, achieve >90 per cent Eliwana rail closure plans to various committee to oversee closure planning recycling rate for total waste volumes and implementation. regulators for approval • By the end of FY20, identify a sustainable • Independent assessments of Fortescue’s disposal method for OTRs and conveyor closure cost methodology and of Objective belt. Increase community participation in mine Christmas Creek’s infrastructure demolition and disposal costs were closure and post-mining industries. Reducing waste generation through the completed as part of ongoing cost prevention, reduction, recycling and reuse Target validation and improvement cycle. By the end of FY18, develop a stakeholder of waste produced during operations is engagement strategy on mine closure. Sustainable rehabilitation a priority for Fortescue. The Company Progressive rehabilitation activities have continues to investigate options to minimise Fortescue’s mine closure planning is been integrated into Fortescue’s standard the volumes of general waste being sent to focussed on returning the land to a state operating procedures to ensure the required landfill. that will provide future use and value environmental performance objectives will All waste generated across Fortescue’s when mining is complete. Fortescue will be met on closure. operations is managed in accordance with continue to work with its stakeholders In FY18, these activities included: the Waste Management Plan and Hazardous including local communities, Traditional Materials Management Procedure. No Custodians and government agencies • Direct disposal (backfill) of more than hazardous waste as classified under the when considering post-closure land uses 100,000,000 tonnes of the waste rock into Basel Convention, was generated or and developing achievable objectives. exhausted mine pits • Ongoing geochemical and physical disposed of by Fortescue during FY18. Mine closure is initially considered characterisation of the mineral waste rock during the feasibility phase of project During FY18, Fortescue developed a product • Regular review, including computer development, when objectives are lifecycle and waste disposal procurement modelling, of proposed post-mining discussed and agreed with stakeholders policy, excluding OTRs. The Company was landforms and water systems and site strategies to minimise close to its recycling target of 90 per cent, • Monitoring of local water quality and environmental impacts are developed. achieving a recycling rate of 86 per cent for vegetation health indicators. total waste volumes across all sites. To minimise the potential financial, social To ensure responsible rehabilitation and environmental risks of mine closure, Most mine processing waste rock and these strategies are refined over the life of practices are implemented throughout each overburden is disposed of in mined out pits. each operation. This also ensures maximum stage of the mining life cycle, Fortescue effectiveness in rehabilitation activities. applies an integrated approach where Closure plans and financial provisions to rehabilitation monitoring procedures are execute these plans are developed and tailored to local environmental issues, using maintained for 100 per cent of Fortescue’s indices such as plant species diversity and operational sites. Financial provisions for composition, nutrient cycling, infiltration closure are included in Fortescue’s FY18 and erosion. Annual Report. Monitoring activities completed during During FY18, work included: FY18 included over 100 rehabilitation and • The establishment of a Closure Steering associated control transects and over 50 Committee to oversee the planning and photo monitoring points, as well as weed implementation of closure programs and mapping and monitoring programs, and activities management, where required, across • Development of a new stepped Fortescue’s operations. landform waste dump design, based on the physical properties of waste rock, which computer models suggest will generate lower total volumes of eroded sediment over the long-term than the industry’s standard design.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 10 Corporate Directory

89 10 | Corporate Directory Navigational index Fortescue’s CSR report contains Standard Disclosures from the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines and the associated Mining and Metals Sector Supplement.

Fortescue’s CSR report also serves as its Active Level Communication on Progress for the United Nations Global Compact. The Navigation Index indicates the sections of Fortescue’s FY18 Corporate Social Responsibility Annual Report and FY18 Corporate Governance Statement that align with the GRI Standards, the principles of the United Nations Global Compact, the 10 principles of the International Council on Mining and Metals and the UN Sustainable Development Goals.

General Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles 102-1 Name of the organisation About this Report: page 2

102-2 Activities, brands, products About Fortescue: page 6 and services Operating and Financial Review: pages 18-21

102-3 Location of headquarters About Fortescue: page 6 Full address: page 104

102-4 Location of operations About Fortescue: page 6

102-5 Ownership and legal form About Fortescue: page 6 Annual Report – Shareholder information: page 138

102-6 Markets served About Fortescue: page 6

102-7 Scale of the organisation About Fortescue: page 6 FY18 Annual Report - Operating and Financial Review – Overview of Operations, Financial Results and Position: pages 20- 34, pages 55-105

102-8 Information on employees Fortescue Family: pages 40-49 6 and other workers Data tables: pages 98-100

102-9 Supply chain Fortescue’s Supply Chain: page 74 Engaging with Stakeholders: pages 31-35

102-10 Significant changes to the FY18 Annual Report - Financial Report – organisation and supply Director’s Report: pages 55-58 chain

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 General Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles 102-11 Precautionary Principle or FY18 Corporate Governance Statement 1,2,4 7 approach Risk Management: pages 12-13 Protecting biodiversity: pages 80-83

102-12 External initiatives Message from CEO: pages 4-6 2 Fortescue’s approach to CSR: page 53 Memberships and Commitments to external initiatives relevant to CSR: page 96

102-13 Memberships Message from CEO: pages 4-6 2 Fortescue’s approach to CSR: pages 22-23

102-14 Statement from senior Message from CEO: pages 4-6 2 1,4,5 decision-maker 102-15 Key impacts, risks and Material issues: page 25 opportunities Throughout report 102-16 Values, principles, standards Vision and Values: page 16 1,2 10 and norms of behaviours Throughout report

102-18 Governance structure Corporate Governance: page 30 1

102-32 Highest governance Corporate Governance: page 30 1 body’s role in sustainability Respecting human rights: page 73 reporting Fortescue’s response to climate change: page 77 102-40 List of stakeholder groups Engaging with stakeholders: pages 31-35 4,10

102-41 Collective bargaining Fortescue Family: page 40 3 3 agreements 102-42 Identifying and selecting Engaging with stakeholders: pages 31-35 4,10 stakeholders 102-43 Approach to stakeholder Engaging with stakeholders: pages 31-35 4,10 engagement 102-44 Key topics and concerns Engaging with stakeholders: pages 31-35 4,10 raised 102-45 Entities included in the About Fortescue: page 6 consolidated financial FY18 Annual Report – Notes to the statements Consolidated Financial Statements: pages 101-103 102-46 Defining report content and Fortescue’s approach to CSR: pages 22-23 2 its Boundary 102-47 List of material topics Material Issues: page 25 2 United Nations Sustainable development Goals: pages 26-28 102-48 Restatements of information Restatements of information are noted in the text 102-49 Changes in reporting Fortescue’s approach to CSR: pages 22-23

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General Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles 102-50 Reporting period About this Report: page 2 10

102-51 Date of most recent report 2018

102-52 Reporting cycle About this Report: page 2

102-53 Contact point for questions About this Report: page 2 regarding the report 102-54 Claims reporting in About this Report: page 2 accordance with the GRI standards 102-55 GRI Content index Corporate Directory: pages 90-96

102-56 External Assurance About this Report: page 2 10

Management Approach

GRI Standard Disclosure Location ICMM Principles UNGC Principles 103-1 Explanation of the material Covered for each material issue 4,10 topic and its Boundary throughout the report. Material Issues: page 25 103-2 The management approach Covered for each material issue and its components throughout the report. Material Issues: page 25 103-3 Evaluation of the Covered for each material issue management approach throughout the report. Material Issues: page 25 Economic performance 201-1 Direct economic value Fortescue’s approach to Tax: pages 54-56 9 generated and distributed FY18 Annual report – Financial Results and Position: pages 55-105 201-2 Financial implications and Fortescue’s response to climate change: 6 7 other risks and opportunities pages 75-79 due to climate change

Specific Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles Material Topic: Employee health, safety and wellbeing Occupational Health and safety DMA Disclosure on Management Employee health, safety and wellbeing: Approach pages 36-37 403-2 Types of injury and rates of Employee health, safety and wellbeing: 5 1 injury, occupational diseases, pages 36-37 lost days, and absenteeism, Data tables: page 98 and number of work-related fatalities

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Specific Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles Material Topic: Diversity Diversity and equal opportunity DMA Disclosure on Management Workplace diversity: pages 43-49 Approach 405-1 Diversity of governance Workplace diversity: pages 43-49 3 6 bodies and employees Employee training and education 404-1 Average hours of training per Data tables: page 100 5 6 year per employee 404-2 Programs for upgrading Fortescue Family: page 41 3 6 employee skills and transition assistance programs 404-3 Percentage of employees Data tables: page 100 3 6 receiving regular performance and career development reviews Employment 401-1 Total number and rates of Data tables: pages 99-100 3 6 new employee hires and employee turnover 401-2 Benefits provided to full-time Fortescue Family: page 40 6 employees that are not Data tables: page 100 provided to temporary or part-time employees 413-2 Operations with significant Engaging with our stakeholders: 3,9 1,2 actual and potential pages 31-34 negative impacts on local Building communities: pages 69-72 communities Material Topic: Ethical conduct, anti-bribery and corruption Anti-corruption DMA Disclosure on Management Ethical conduct, anti-bribery and Approach corruption: pages 52-53

205-3 Confirmed incidents of Ethical conduct, anti-bribery and 1 10 corruption and actions taken corruption: page 53

Material Topic: Protecting Aboriginal heritage Rights of Indigenous peoples DMA Disclosure on Management Protecting Aboriginal heritage: page 50 Approach G4-MM5 Total number of operations Protecting Aboriginal heritage: page 50 3,9 1,2 taking place in or adjacent to Indigenous peoples’ territories, and number and percentage of operations or sites where there are formal agreements with indigenous peoples’ communities

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Specific Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles Material Topic: Building Local Communities Indirect Economic Impacts DMA Disclosure on management Building communities: pages 69-72 approach

203-2 Significant indirect economic Building communities: pages 69-72 impacts

Procurement practices 204-1 Proportion of spending on Building communities – page 69 2,9 6 local suppliers

Material Topic: Respecting human rights Human Rights assessment DMA Disclosure on Management Respecting human rights: page 73 Approach 412-1 Operations that have Respecting human rights: page 73 3 1,2 been subject to human rights reviews or impact assessments 412-2 Employee training on human Respecting human rights: pages 73-74 3 1,2,3,4,5,6 rights policies or procedures

412-3 Significant investment Respecting human rights: pages 73-74 2 1,2,3,4,5,6 agreements and contracts that include human rights clauses or that underwent human rights screening

Supplier environmental assessment Supplier environmental assessment 308-1 New suppliers that Respecting human rights: pages 73-74 6 7,8,9 were screened using environmental criteria Child labour 408-1 Operations and suppliers at Respecting human rights: pages 73-74 3 1,2,5 significant risk for incidents of child labour

Forced or compulsory labour 409-1 Operations and suppliers at Respecting human rights: pages 73-74 3 1,2,4,5 significant risk for incidents of forced or compulsory labour

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Specific Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles Material Issue: Protecting the environment Biodiversity DMA Disclosure on management Protecting biodiversity: pages 82-83 approach 304-1 Operational sites owned, Protecting biodiversity: pages 82-83 7 8 leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas G4-MM1 Amount of land (owned Data tables: page 101 6 8 or leased, and managed for production activities or extractive use) disturbed or rehabilitated G4-MM2 The number and percentage Protecting biodiversity: pages 82-83 7 8 of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place 304-2 Significant impacts of Protecting biodiversity: pages 82-83 7 8 activities, products, and services on biodiversity 304-3 Habitats protected or Protecting biodiversity: pages 82-83 7 8 restored 304-4 IUCN Red List species and Protecting biodiversity: pages 82-83 7 8 national conservation list species with habitats in areas affected by operations

Closure planning G4-MM10 Number and percentage or Mine closure: page 88 6,9 7 operations with closure plans

Water 303-1 Water withdrawal by source Data tables: page 101 6 7,8

303-3 Water recycled and reused Data tables: page 101 8

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Specific Standard Disclosures

GRI Standard Disclosure Location ICMM Principles UNGC Principles Material Issue: Safeguarding the environment Effluents and waste 306-2 Waste by type and disposal Data tables: page 101 6 8 method 306-4 Transport of hazardous waste Reducing waste: page 88 8

Material Topic: Climate change

Emissions DMA Disclosure on management Fortescue’s response to climate change: approach pages 75-80 305-1 Direct (Scope 1) GHG Fortescue’s response to climate change: 6 8 emissions page 80 305-2 Energy indirect (Scope 2) Fortescue’s response to climate change: 6 8 GHG emissions page 80 305-4 GHG emissions intensity Fortescue’s response to climate change: 6 8 page 80 305-5 Reduction of GHG emissions Fortescue’s response to climate change: 6 8 page 80

Memberships and Commitments to external initiatives relevant to CSR Australian Memberships • United Nations Global Compact Network Australia • Business Council of Australia • Australia-China Business Council • Association of Mining and Exploration Companies (AMEC) • Australian Mines and Metals Association. • Corporate Tax Association • Chamber of Commerce and Industry of Western Australia • DomGas Alliance.

International Memberships • United Nations Global Compact

Commitments to External Initiatives/Standards • Tax Transparency Code of Australia 2016 • International Council on Mining and Metals (ICMM) Sustainable Development Principles • Recommendations of the Task Force on Climate-related Financial Disclosures Transparency (TCFD) • Dow Jones Sustainability Index • UN Guiding Principles on Business and Human Rights • ISO Standards o 14001 – Environmental Management o 3100 – Risk Management.

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 In FY18, Fortescue celebrated a number of milestones, none of which could have been achieved without the support of its employees, contractors, suppliers, community members, government, shareholders, Native Title Partners, and pastoralists. Fortescue thanks everyone who has been part of its 15 year journey.

15 10 1 Year Years Billion ANNIVERSARY SINCE FIRST ORE TONNES IRON PRODUCED ORE SHIPPED

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Health and safety data Fatalities Region FY18 FY17 Australia 0 0 China 0 0 Singapore 0 0 Ecuador 0 NA Total 0 0 Safety Excellence and Culture Survey participation (%) 94 92 Positive drugs test results (%) 0.55 0.32 TRIFR Region FY18 FY17 Australia 3.7 2.9 China 0 0 Singapore 0 0 Ecuador 0 0 Total 3.7 2.9

Injury Severity Rate FY18 Region Employees Contractors Australia 74 176 China 0 0 Singapore 0 0 Ecuador 0 0 Total 74 176 Recordable occupational illness rate FY18 Region Employees Contractors Australia 0.2 0.1 China 0 0 Singapore 0 0 Ecuador 0 0 Total 0.2 0.1 Regional safety fines FY18 Region No. Value ($) Australia 0 0 International 0 0 Total 0 0

Employment data FY18 Number of staff by gender (employees and labour hire) Male 4,749 Female 1,002 Total 5,751 Number of staff by employment type (employees and labour hire) Full-time 3,953 Part-time 347 Fixed term Full-time 174 Fixed term Part-time 5 Casual 46 Labour Hire 1,226 Total 5,751 Flexible working arrangements No. of staff that utilised flexible working arrangements 360 Number of staff by employment category (employees only) Machinery operators and drivers 1,630 Technicians and trade 1,353 Professional 820 Clerical and administrative 168 Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Employment data Number of staff by employment category (employees only) continued Other managers 156 Labourers 124 Senior managers 119 Technicians and trade (Apprentice) 76 Community and personal service 39 Other executives/general managers 33 Professional (Graduate) 3 Key Management Personnel (KMP) 3 CEO 1 Total 4,525 Number of staff by region (employees and labour hire) Australia 5,672 China 13 Singapore 12 Ecuador 54 Total 5,751 Females working in Perth office 325 Aboriginal people working on Pilbara sites 774 Age distribution (employees and labour hire) < 30 Male 883 < 30 Female 273 31-50 Male 2,865 31-50 Female 587 51+ Male 1,001 51+ Female 142 Total 5,751 Females in management positions (%) Females in senior leadership 24 Females in management positions 22 Board membership Male 4 Female 5 Aboriginal employment data (employees and labour hire) Employees – Male 607 Employees – Female 203 Total 810 Aboriginal people working across all sites No. of Aboriginal people working across all sites 1,161 % of employees that are Aboriginal 14.1 Employee turnover Voluntary turnover (%) 10.5 Involuntary turnover (%) 2 Total 12.5 Voluntary turnover by gender (direct employees only) Male (%) 10.2 Female (%) 11.7 Voluntary turnover by region – (direct employees only) Australia 474 China 0 Singapore 0 Ecuador 0 Total 474

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Employment data Voluntary turnover by age group (direct employees only) < 30 Male 76 < 30 Female 29 31-50 Male 242 31-50 Female 53 51+ Male 64 51+ Female 10 Total 474 Parental leave Employees who took primary carers parental leave 95 Parental leave retention rate (%) 96 Employees eligible for parental leave (%) 88 Female employees who took primary carers parental leave 82 Percentage of employees receiving regular performance and career development reviews Male 100 Female 100 Total hours of training by gender Male 146,222 Female 23,881 Average hours of training by gender Male 41 Female 27 Total hours of training by employee type Permanent Full-time 154,437 Fixed term 4,222 Part-time 11,415 Health and safety training in hours by gender Male employees 19,303 Female employees 2,426 Male contractors 51,156 Female contractors 4,780 New employee hires by gender (Direct) Male 603 Female 155 Total 758 New employee hires by region (Direct) Australia 701 China 2 Singapore 0 Ecuador 55 Total 758 New employee hires by age (Direct) < 30 Male 183 < 30 Female 55 31-50 Male 346 31-50 Female 87 51+ Male 74 51+ Female 13 Total 758

Native title and heritage FY18 No. of reportable heritage incidents 0 No. of achieved heritage places managed 5,597 Land ethnographically surveyed (ha) 202,575 Land ethnographical surveyed (ha) 2,095,346 No. of Land Access Agreements in place 7

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Environment and water FY18 Land Total land disturbed (ha) 27,304 Total land rehabilitated (ha) 4,008 No. of Land Access Agreements in place 7 Greenhouse gas emissions Total Scope 1 and Scope 2 emissions (million tonnes CO2e) 1.68 Total Scope 1 and Scope 2 reduction since FY15 (%) 12.8 Reduction in GHG emissions intensity since FY15 (%) 13.5 Emissions intensity in electricity generation (t CO2e/wmt (‘000)) 3.78 Reduction in emissions intensity in energy consumption from FY17 13 levels (%) Emissions intensity in energy consumption 348.9 Water withdrawn by source (kL) Surface water withdrawal 0 Groundwater withdrawal 142,292,710 Sea water withdrawal 530,992 Rainwater collected/stored 0 Municipal water supplies, other public or private water utilities 17,658 Water sources significantly affected by withdrawal of water 0 Returns to the environment (kL) Managed aquifer recharge 91,679,678 Surface water discharge 0 Supplementation 2,907,454 Evaporation and seepage 988,258 No. of reportable environmental incidents 7

Water use (kL) Ore processing facilities 31,820,491 Potable camp supply 1,124,400 Dust suppression 7,036,979

Waste FY18 Total waste (t) 13,513 Material recycled (%) 86 Material landfilled (%) 14 Waste rock (wmt) Total overburden 267,444,672 Total ore mined 184,501,578 Total tailings 21,375,094

Taxes paid FY18 Company taxes (A$ million) 381 Royalties (A$ million) 529 Foreign (A$ million) 12 Employment (A$ million) 260 Total (A$ million) 1,182

Salaries and benefits (A$million) FY18 Total salaries (A$ million) 693.7 Total superannuation (A$ million) 71.4 Amount of housing support (A$ million) 11

101 10 | Corporate Directory Glossary Aboriginal 250 kilometres south east of Fortescue’s Herb Fortescue River Gas Pipeline Describes both Aboriginal and Torres Strait Elliott Port in Port Hedland. A 270 kilometre gas pipeline which delivers Islander people. natural gas from the Dampier to Bunbury CID Aboriginal owned businesses Channel Iron Deposit. Contractors, joint ventures, subcontractors Pipeline to the main power station in the CLT or other legal entities owned by Aboriginal Solomon Hub. Abbreviation for Fortescue’s Core Leadership people. team. FY Australian Accounting Standards Refers to a Financial Year. CO2e Australian Accounting Standards are Carbon dioxide equivalent which is the Gearing developed, issued and maintained by the internationally recognised measure of Debt/(debt + equity). Australian Accounting Standards Board, greenhouse gas emissions. an Australian Government agency under GJ the Australian Securities and Investments Contestable spend Gigajoules. Spend that is subject to Fortescue’s Commission Act 2001. GRI procurement process, in accordance AMMA The Global Reporting Initiative (GRI) is an with Fortescue’s Procurement Policy. It Australian Mines and Metals Association. international independent organisation excludes shipping, Government costs or which has developed a standard for charges, including royalties, donations, ASX sustainability reporting and disclosure. Australian Securities Exchange. subscriptions and memberships, Native Title group payments (other than payments Ha ASX 100 Resource Index as consideration for the provision of direct Hectares. A capitalisation-weighted index which goods or services), property leasing, related Hematite measures the performance of the resources Fortescue entities and legal fees. sector of the ASX 100. The index is calculated An iron ore compound with an average iron on an end of day basis. Contractors ore content of between 57 per cent and 63 Non-Fortescue employees, working with per cent Fe. Hematite deposits are typically ASX Corporate Governance Principles the Company to support specific business large, close to the surface and mined via and Recommendations (Third Edition) activities. open pits. Principles and recommendations developed and released by the ASX Corporate Corporations Act HSES Governance Council on the corporate Corporations Act 2001 of the Commonwealth Health, safety, environment and security. of Australia. governance practices to be adopted by ICMM ASX listed entities and which are designed DID The International Council on Mining and to promote investor confidence and to Detrital Iron Deposit. Metals, established in 2001 to act as a catalyst assist listed entities to meet shareholder for performance improvement in the mining Direct employees expectations. and metals industry. Total number of employees including Beneficiation permanent, fixed term and part-time. Does Indigenous Land Use Agreements (ILUA) Beneficiation is a process whereby ore not include contractors. Statutory agreement between a native title is pulverised into fine particles and the group and others about the use of land and dmt higher grade material is separated, often waters. magnetically, from the gangue (waste). Dry metric tonne. IUCN dmtu BID International Union for Conservation of Dry metric tonne unit. Bedded Iron Deposit. Nature. EPA bt Kings CID Fines Billion tonnes. Environmental Protection Authority. Fortescue’s stand-alone product produced from Channel Iron Deposit Ore from its C1 Cost Fe Kings mine in the Solomon Hub, with an Operating costs of mining, processing, rail The chemical symbol for iron. iron grade of 57.3 per cent Fe. and port on a per tonne basis, including FIFO allocation of direct administration charges Fly-in Fly-out is defined as circumstances of Key Management Personnel and production overheads. work where the place of work is sufficiently Key Management Personnel (KMP) are those persons having authority and responsibility CFR isolated from the worker’s place of residence to make daily commute impractical. for planning, directing and controlling the A delivery term that indicates that the activities of the entity, directly or indirectly, shipment price includes the cost of goods, Fortescue including any director (whether executive or freight costs and marine costs associated Fortescue Metals Group Limited otherwise) of that entity. with a particular delivery. (ACN 002 594 872) and its subsidiaries. Chichester Hub Fortescue’s mining hub with two operating iron ore mines, Cloudbreak and Christmas Creek, located in the Pilbara, approximately

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 Kings CID Fines Greenhouse and Energy Reporting Act 2007 TRIFR Fortescue’s stand-alone product produced (NGER Act). Total Recordable Injury Frequency Rate per from Channel Iron Deposit Ore from its Kings million man hours worked, comprising lost NPAT mine in the Solomon Hub, with an iron grade time injuries, restricted work and medical of 57.3 per cent Fe. Net profit after tax. treatments. kL OPF Underlying EBITDA Kilolitre. Ore Processing Facility. Underlying EBITDA is defined as earnings Pilbara before interest, tax, depreciation and Labour Hire The Pilbara region in the north west of amortisation, exploration, development and Contractors backfilling permanent Fortescue Western Australia. other expenses. roles and not hired in a service contractor capacity. Probable Ore Reserve Underlying EBITDA margin As defined in the JORC Code, the Underlying EBITDA / Operating sales Local supplier economically mineable part of an revenue. Suppliers based in the Pilbara region. indicated mineral resource, and in some UNGC LOM circumstances, a measured mineral resource. United Nations Global Compact provides Life of Mine, being the number of years over It includes diluting materials and allowances a leadership platform for business that which available reserves will be extracted. for losses which may occur when the are committed to aligning their strategies material is mined. Appropriate assessments m3 and operations with ten universally and studies have been carried out, and Cubic metres. accepted principles in human rights, labour, include consideration of and modification environment and anti-corruption. Magnetite by realistically assumed mining, An iron ore compound that is typically metallurgical, economic, marketing, legal, Voluntary employee turnover a lower iron content than Hematite iron environmental, social and governmental Permanent and fixed term employees who ore. Magnetite ore requires significant factors. These assessments demonstrate at left Fortescue voluntarily for reasons not beneficiation to form a saleable concentrate. the time of reporting that extraction could initiated by the Company. After beneficiation, Magnetite ore can be reasonably be justified. VTEC palletised for direct use as a high-grade raw Senior Executive Vocational Training and Employment Centre. material for steel production. Leadership position title of Director or wmt mt Group Manager. Wet metric tonne. Million tonnes. Solomon Hub WMYAC mtpa A mining hub with two operating iron ore Wirlu-murra Yindjibarndi Aboriginal Million tonnes per annum. mines, Firetail and Kings. The Hub is located Corporation. Net gearing approximately 60 kilometres north of the WTI (Debt - cash)/(debt - cash + equity). township of Tom Price and 120 kilometres west of the railway that links the Chichester West Texas Intermediate. NGER Hub to Port Hedland. The National Greenhouse and Energy Reporting (NGER) Scheme was introduced Super Special Fines in 2007 to provide data and accounting in Fortescue’s iron ore product from the relation to Greenhouse Gas emissions and Chichester Hub, with an iron content of 56.4 energy consumption and production. The per cent Fe. NGER Scheme operates under the National

103 10 | Corporate Directory

Corporate information

Contact Information Stock Exchange listings Stay in touch Fortescue registered office Australian Business Number Latest news, reports and Australia ABN 57 002 594 872 presentations via email Level 2, 87 Adelaide Terrace If you would prefer to receive information East Perth, WA 6004 Auditor such as Annual Reports, notices of meetings T: +61 8 6218 8888 PwC and announcements via email, F: +61 8 6218 8880 Level 15, 125 St Georges Terrace you can change your communication E: [email protected] Perth, WA 6000 preferences on the Registry website: www.fmgl.com.au www.pwc.com.au www.linkmarketservices.com.au

Fortescue Shipping office Twitter Shanghai, China Securities Exchange listings @FortescueNews 33/F East Building, Eton International Fortescue Metals Group Limited shares are Business Plaza listed on the Australian Securities Exchange (ASX) 555 Pudong Ave, Pudong, PC200120 au.linkedin.com/company/fortescue- ASX Code: FMG Shanghai, P.R China metals-group

Singapore Fortescue Share Registry FMG International, The Central Link Market Services Limited 8 Eu Tong Sen St, 24-91 Singapore 059818 Level 12, QV1 Building www.youtube.com/user/ 250 St Georges Terrace FortescueMetalsGroup Fortescue VTEC and Perth, WA 6000 Community office Locked Bag A14 1B/2 Byass St Sydney South, NSW 1235 Event calendar 2018 T: 1300 733 136 (within Australia) South Hedland, WA 6722 Key dates for Fortescue shareholders in T: +61 2 8280 7603 (International) T: +61 8 9158 5800 2018. Please note dates are subject to F: +61 2 9287 0309 F: +61 8 6218 8880 review. E: [email protected] www.linkmarketservices.com.au Full year results announcement E: [email protected] 20 August 2018 September Quarterly Production Report Orange, NSW 25 October 2018 5 Corporation Place Orange, NSW 2800 Annual General Meeting 15 November 2018

Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 THE DREAM 2003 BEGINS 04 Cloudbreak identified 04

S&P/ASX 200 index 05 06 Port Hedland groundbreaking 06

07

08 FIRST ORE ON SHIP 08

09 27mtpa shipped

10 Christmas Creek expanded 10 Inside 11 Solomon 11 construction begins 01 Overview 02 Operating and Financial Review 03 Approach to Corporate Social Responsibility 57.5mtpa shipped 12 04 Corporate Governance Firetail opened 05 Engaging with stakeholders 13 at Solomon 13 06 Setting high standards 80.9mtpa shipped 07 Creating positive social change 155MTPA SUSTAINABLE 14 PRODUCTION 08 Fortescue’s approach to climate change Kings Valley project 14 opened at Solomon 09 Safeguarding the environment • Anderson Point Berth 5 completion 10 Corporate Directory 15 • Fortescue River Gas Pipeline completion 15 • 500 millionth tonne of ore shipped • 165mtpa shipped sustainable production • US$2.9 billion debt repaid in FY16 • 169.4mt shipped in FY16 • Fortescue celebrates arrival of first ore carrier, 16 FMG Nicola into Port Hedland • Fortescue recognised as lowest cost iron ore supplier into China 17 • Achieved lowest ever TRIFR of 2.9 • 170.4mt shipped in FY17 FORTESCUE CELEBRATES: 18 • 1 billion tonnes of iron ore • 10 years since first ore 18 Core Leadership team appointed shipped to China • 15 years since the Company’s inception THE JOURNEY CONTINUES Fortescue Metals Group Limited Corporate Social Responsibility Report FY18 ABN 57002594872 Together we are Fortescue Responsibility Social Corporate FY18 Report