FY20 Sustainability Report

Home , Fortescue Metals Group, Newcrest Mining

ABN 57 002 594 872

Thriving communities | Global force Our Purpose Thriving communities | Global force

Our Culture We are a values-based business with a strong, differentiated culture. We believe that by leveraging the unique culture of our greatest asset, our people, we will achieve our stretch targets

Our Values

Safety Family Empowerment Frugality Stretch targets

Courage and Generating Integrity Enthusiasm determination ideas Humility FY20 Year at a glance

A$ 2.4 1 7. 2 bn Total Recordable Injury Total global economic Frequency Rate contribution

% A$ 14 2.7bn Aboriginal employment Contracts to rate across Aboriginal businesses Pilbara operations and joint ventures

% A$ 26 6.6 m Female employment Social investment in rate in senior our communities leadership roles About this report

Fortescue Metals Group Ltd (Fortescue) values its stakeholder relationships and is committed to open and transparent communication.

This report details Fortescue’s performance This report captures our operations including against key material sustainability those under exploration and development and commitments and targets during the financial those operated through subsidiaries and joint year 1 July 2019 to 30 June 2020 (FY20). It is ventures where we have management control. part of our annual reporting suite which also All references to our, we, us, the Group and includes the FY20 Annual Report, FY20 Climate Fortescue refer to Fortescue Metals Group Ltd Change Report and the FY20 Corporate (ABN 57 002 594 872) and its subsidiaries. Governance Statement, all of which are All references to a year are to the financial year available on our website at www.fmgl.com.au ended 30 June 2020 unless otherwise stated.

The report has been prepared for our Assurance stakeholders including employees, shareholders, community groups, government, Management has sought independent, customers and non-government organisations. third party verification of a range of metrics in this report. This includes data on safety We are a signatory to the United Nations Global performance, Aboriginal employment, Compact (UNGC), and this report outlines the Billion Opportunities initiative and our ongoing commitment to report progress gender diversity. Independent assurance towards the principles of the UNGC. The report on emissions data is discussed in our has been prepared in accordance with the FY20 Climate Change Report. Global Reporting Initiative (GRI) Standards core option. A copy of the GRI content index is Feedback provided on pages 107 to 112. We value all feedback. Please forward any comments on this statement or The report also considers issues identified requests for additional information to through Fortescue’s Risk Management [email protected] Framework and guidance provided by key bodies including the International Council on Mining and Metals (ICMM). Contents

Overview 04 Operating and financial review 18 Our approach to sustainability 23 Corporate Governance 30 Setting high standards 39 Safeguarding the environment 68 Creating positive social change 85 Corporate Directory 106 Overview | Operating and financial review

01 Overview

6 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

Operating Chief Executive Elizabeth Gaines Officer'smessage sustainability Our approach to

Fortescue was founded on

the belief that the communities

in which we operate should Corporate Governance benefit from our success. Today, we are a global force, committed to empowering thriving communities. stakeholders Engaging with

Building a strong business a A$6.6 million donation to Lifeline, of the entire Fortescue family is our

FY20 was a year of record Foodbank and the Royal Flying number one priority and we are achievements for Fortescue, Doctor Service (RFDS) facilitated committed to continuously improving underpinned by the hard work by the Chamber of Minerals and as we strive to become global leaders and dedication of the entire Energy of Western Australia. Our in safety. This year, 96 per cent of

Fortescue team. additional A$1 million donation to the our employees and contractors standards Setting high RFDS ensured it had the necessary participated in our annual Safety The team has delivered strong resources, infrastructure, capital and Excellence and Culture Survey, results for the year, achieving our people to safely deliver its range of providing valuable feedback on how lowest Total Recordable Injury 24/7 healthcare services for remote we can continue to build on the Frequency Rate (TRIFR) safety and regional West Australians. culture that makes Fortescue a great performance of 2.4, as well as record and safe place to work. shipments of 178.2 million tonnes Economic contribution Our strong and inclusive culture (mt), while maintaining our industry Fortescue continues to provide

underpins our approach to diversity environment Safeguarding the leading cost position of US$12.94/ substantial contributions to the wet metric tonne (wmt). and increasing female and Aboriginal West Australian and Australian employment across Fortescue is a Our sustained focus on the economic economy. In FY20, we made a total key priority. Our female employment success of our business allows us to global economic contribution of rate increased in FY20 with females contribute to our communities and A$17.2 billion including A$4.3 billion holding 19 per cent of total roles and societal outcomes more broadly. in government tax and royalty 26 per cent of senior leadership roles. payments. The COVID-19 pandemic has During the year, the mining industry’s We recognise our role in reliably

caused unprecedented disruption approach to protecting Aboriginal change social Creating positive to our homes and workplaces. We delivering iron ore shipments in the heritage came into focus. Fortescue’s understand the ongoing impact of interests of maintaining jobs and the seven Native Title Land Access COVID-19 is challenging for many, flows of taxes and royalties which Agreements and many dozens of especially small businesses, and we contribute to economic activity at Aboriginal heritage agreements have have implemented practical solutions this time of critical national need. established detailed processes for to assist them as this global health the conduct of Aboriginal cultural and economic crisis continues. Setting high standards heritage surveys, consultation, Fortescue is proud to be a leader project planning, impact mitigation

We have also worked proactively in our community and we take our and negotiation. We have worked Corporate Directory and cooperatively with our responsibility to set high standards closely and transparently with Native industry peers to ensure support seriously. Title Partners and with Traditional for local communities during the Knowledge Holders to avoid almost The health, safety and wellbeing pandemic, including contributing to 6,000 significant heritage places.

Fortescue Metals Group Ltd Sustainability Report FY20 7 Overview | Operating and financial review

Safeguarding the Creating positive social 120 Aboriginal businesses through environment change the award of over A$2.7 billion in contracts and subcontracts Fortescue has a proud history of We believe we are in a unique since 2011. setting stretch targets and during position to support remote the year we announced an emissions Aboriginal communities and reduction goal to achieve net zero contribute to the vibrancy of regional Our people operational emissions by 2040, centres by creating economic Fundamentally, our approach to positioning us as a leader in opportunity. sustainability is driven by our people addressing the global climate and our Values. We are in a privileged change challenge. We support local businesses that position to empower individuals in turn employ local people and we within our company and the Our success will be founded on are building on this strong track community to be their best, to find practical initiatives that will allow record through our growth projects, innovative and practical solutions us to achieve our targets in an Eliwana and Iron Bridge, which have to the most complex business and economically sustainable manner. to-date awarded over A$60 million in societal challenges and to improve Since October 2019, Fortescue contracts to Aboriginal businesses. the bottom line while delivering and our partners have announced positive social change. investments in excess of Since Fortescue was founded by our US$800 million in significant energy Chairman, Dr Andrew Forrest AO in On behalf of the Core Leadership infrastructure projects which will 2003, we have consistently provided Team (CLT), I would like to thank the deliver 25 to 30 per cent of our significant training, employment Fortescue family for their integrity, stationary energy requirements and development opportunities enthusiasm and determination to from solar power. for Aboriginal people. We directly ensure our communities continue employ 844 Aboriginal people, to thrive. This year, we also released representing 10 per cent of our Fortescue’s inaugural Climate Change Australian workforce and 14 per cent Report which details our progress of our Pilbara operations workforce. in managing climate change-related risks and opportunities during FY20. Our procurement initiative Billion The Report is available on our Opportunities is building the website at www.fmgl.com.au capability and capacity of more than

Training delivers life changing opportunities

To contribute to closing the gap between Aboriginal and non-Aboriginal Australians it is critical that Aboriginal people are empowered through training and employment opportunities which help them to become role models in their communities.

Fortescue’s Vocational Training and We also celebrated a significant apprentices, together with our Founder Employment Centre (VTEC) was milestone for our Trade Up trainees. and Chairman, Dr Andrew Forrest, established in 2006 to drive real Established in 2015, Fortescue’s Trade members of the CLT and the Fortescue economic and generational change Up provides Aboriginal and female team in celebrating the completion in the regions where we operate by team members with an accredited of their apprenticeship and successfully providing training for guaranteed pathway to an apprenticeship. gaining permanent employment jobs. This year, we proudly celebrated There are currently 122 participants with Fortescue. the 900th Aboriginal person to be completing the training. offered full time employment after VTEC and Trade Up are wonderful successfully completing the program At a ceremony in December, nine examples of how education and training in either Karratha or Port Hedland. Trade Up participants from the drives sustainable change in people’s inaugural intake joined 15 other lives, careers and communities.

8 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

Operating About Fortescue

A proud West Australian company, Fortescue Metals Group Ltd sustainability Our approach to (Fortescue) is a global leader in the iron ore industry, recognised for its culture, innovation and industry-leading development

of world class infrastructure and mining assets in the Pilbara, Western Australia. Corporate Governance

Since Fortescue was established by Our supply chain extends to our In 2019, we established FMG Trading our Founder and Chairman innovative tug fleet and the eight Shanghai (FMG Trading), a wholly Dr Andrew Forrest AO in 2003, we purpose-built 260,000 tonne owned Chinese sales entity, to have discovered and developed capacity Fortescue Ore Carriers, support our customers through major iron ore deposits, constructed which have been designed to the direct supply of iron ore from some of the most globally significant complement the efficiency of our regional Chinese ports, providing mines and have grown to be one of port and maximise the safety them with an option to purchase the world’s largest producers of and productivity of Fortescue’s smaller volumes in renminbi. stakeholders Engaging with iron ore. operations. Fortescue was founded on the Delivering consistent operational The Fortescue Hive, our expanded belief that our communities should excellence, our integrated mining, Integrated Operations Centre, benefit from our success. Today, rail, shipping and marketing teams brings together our entire supply we are a global force, committed to work together to export 175 to 180 chain to deliver significant empowering thriving communities, million tonnes of iron ore annually safety, productivity, efficiency as we deliver training, employment (mtpa) and our commitment to and commercial benefits and and business development technology and innovation ensures will underpin our future use of opportunities for Aboriginal people. we remain one of the world’s lowest technology including artificial standards Setting high cost iron ore producers. intelligence and robotics. As a large consumer of energy, we have committed to an industry- Fortescue’s wholly owned and fully Through our world class exploration leading carbon emissions target integrated operations in the Pilbara capability together with our of net zero operational emissions include the Chichester and Solomon business development and projects by 2040. To achieve this, we are mining hubs and we are developing focus, we are driving future investing in practical initiatives the Western Hub, home to the growth, targeting the early stage such as the development of wind new Eliwana mine. The Iron Bridge exploration of commodities that and solar energy, as well as gas Magnetite Project, an industry-leader support decarbonisation and the and battery storage hybrid projects environment Safeguarding the in cost and energy efficiency, will be electrification of the transport sector. to displace our current thermal one of the highest-grade magnetite generation. We are also investigating projects in the world. We are undertaking exploration the next phase of hydrogen and activities in New South Wales battery electric vehicle mobility.

Our mining hubs are connected to and South Australia, as well as the five berth Herb Elliott Port and in Ecuador and Argentina, and Fortescue is a values-based the Judith Street Harbour towage preliminary exploration activities on business, committed to our strategic infrastructure in Port Hedland via tenements that are in application goals of ensuring balance sheet 620 kilometres (km) of the fastest, in Colombia, Peru, Portugal and strength and flexibility, investing in change social Creating positive heavy haul railway in the world, Kazakhstan, prospective for copper, the long-term sustainability of our with an additional 143km under gold and lithium. core business while pursuing growth development to support Eliwana. and development options and Our longstanding relationships with delivering enhanced returns to our customers in China have grown shareholders. from our first commercial shipment of iron ore in 2008. Today, we are a core supplier of seaborne iron ore to China and have expanded into Corporate Directory markets including Japan and South Korea.

Fortescue Metals Group Ltd Sustainability Report FY20 9 Overview | Operating and financial review

Value chain

Innovation in process and design has been a key component of Fortescue’s strategy in challenging industry standards to more efficiently and effectively deliver its product suite from mine to market.

Exploration and discovery Challenging geological thinking to identify valuable deposits

Modelling, planning and development Extraction and recovery Innovative use of technology suitable to Fortescue’s deposits

Processing Ore processing facility design and wet processing optimise output

Mine to port Heavy haul rail at 42t axle load

Blending and stockpiling Port design facilitates blending and stockpiling of product suite Ship loading 3 shiploaders and 5 berths maximise outload capacity and utilisation

Marketing Helping customers achieve best value in use Shipping and towage Delivery to Fortescue’s international customers’ specifications 8 Fortescue Ore Carriers Towage fleet provides safe and reliable towage services China port sales FMG Trading Shanghai Co. Ltd (FMG Trading)

Rehabilitation Mine closure and decommissioning

10 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

Operating Our Board overview

Fortescue has a talented and diverse Board committed to sustainability Our approach to enhancing and protecting the interests of shareholders and other stakeholders and fulfilling a strong governance role.

Corporate Governance stakeholders Engaging with

Dr Andrew Forrest AO Mark Barnaba AM Elizabeth Gaines Chairman Lead Independent Director/ Chief Executive Officer/ Deputy Chair Managing Director standards Setting high

environment Safeguarding the

Lord Sebastian Coe CH, KBE Jennifer Morris OAM Dr Jean Baderschneider Non-Executive Director Non-Executive Director Non-Executive Director

social change social Creating positive

Corporate Directory Penny Bingham-Hall Dr Cao Zhiqiang Dr Ya-Qin Zhang Non-Executive Director Non-Executive Director Non-Executive Director

Fortescue Metals Group Ltd Sustainability Report FY20 11 Overview | Operating and financial review

The appointment and reappointment of directors is intended to maintain and enhance the overall quality of the Board through a composition which reflects a diversity of skills, ethnicity, experience, gender and age.

The primary driver for the Board in site visits and annual site tours The Company actively promotes seeking new directors is skills and to operations ethical and responsible decision experience that are relevant to the • Visits to meet with key making through its Values and Code of needs of the Board in discharging its customers that strengthen their Conduct and Integrity that embodies responsibilities to shareholders. All understanding of the Company’s these Values. new Board members benefit from a key markets comprehensive induction process The Board and each of its Committees • Regular formal and informal that supports their understanding of have established a process to opportunities for the directors to Fortescue’s business. evaluate their performance annually. meet with management and staff. The process is based on a formal Fortescue’s policy is to assess all questionnaire covering a range of The Board has established potential Board candidates without performance topics. The process is Committees to assist in the regard to race, gender, age, physical managed by the Company Secretary execution of its duties and to ensure ability, sexuality, nationality, under the direction of the Lead that important and complex issues religious beliefs, or any other factor Independent Director. The most recent are given appropriate consideration. not relevant to their competence review was undertaken in June 2020. The primary Committees of the and performance. Board are the Remuneration and The results and recommendations There is also a range of support People Committee, the Audit and from the evaluation of the Board and given to Board members which Risk Management Committee, the Committees are reported to the full enables them to stay strongly Nomination Committee and the Board for further consideration and connected to Fortescue, its culture Finance Committee. action, where required. and Values. Each Committee has a non-executive At the date of this report, the Board has This support includes: Chair and operates under its own eight non-executive directors and one Charter which has been approved • Opportunities for significant executive director, being the Chief by the Board. contribution to the annual strategy Executive Officer, Elizabeth Gaines. The Board believes that an appropriate setting process conducted with Directors are expected to act mix of non-executive and executive executive and senior management independently and ethically directors is beneficial to its role • Regular briefings from executive and comply with all relevant and provides strong operational and senior management regarding requirements of the Corporations and financial insights to support all major business areas, tailored Act 2001, ASX Listing Rules and the the business. Company’s Constitution.

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He is Global Patron of the Centre for Global Head of the Natural Resources Dr Andrew Forrest AO Humanitarian Dialogue, recipient of Group). He has previously chaired the

State Theatre Company of Western the Australian Sports Medal and the Operating Chairman Australian Centenary Medal, and Vice- Australia, the West Coast Eagles (an Appointed Chairman in July 2003; Patron of the SAS Resources Fund. Australian Rules Football League Assumed role of Chief Executive team) and several large publicly listed He was a Councillor of the Global Officer in 2005; Resumed non- (ASX) companies within the mining Citizen Commission, charged by executive responsibilities in July 2011. and infrastructure sectors. the UN, to modernise the Universal Dr Forrest is Australia’s most active Declaration of Human Rights He is also a member of the Board (and sustainability Our approach to philanthropist and one of the presented to the UN Secretary Chairman of the Audit Committee) most effective business leaders of General in April 2016. Dr Forrest of the Reserve Bank of Australia his generation. was appointed by the Prime Minister and was the inaugural Chairman of and Cabinet of Australia to chair the University of Western Australia

As Fortescue’s Founder and the Review of Indigenous Training Business School Board from 2002 Chairman, he has led the Company and Employment Programmes, to to 2020 and now holds the title of from inception to its Top 10 status on end Indigenous disparity through (inaugural) Emeritus Board Member, the Australian Stock Exchange, employment; its recommendations are also serving as an Adjunct Professor Corporate Governance during which time Fortescue invested being slowly implemented. in Finance. more than US$27 billion in the resources sector. He was Western Australia’s 2017 Mr Barnaba also chairs GLX (a Australian of the Year for his specialist technology company that In 2001, Dr Forrest co-founded outstanding contribution to the develops software based marketplace the Minderoo Foundation with his community. In 2018, Dr Forrest solutions for commodity markets) wife Nicola. It has supported over was inducted into the Australian and the Hospital Benefit Fund (HBF) 300 initiatives across Australia and Prospectors & Miners’ Hall of Fame Investment Committee, is a member of internationally in pursuit of a range and was the inaugural winner of the the Senior Advisory Board of Appian stakeholders Engaging with of causes. In April 2020, the Forrests EY Global Entrepreneur of the Year Capital (a London based pure-play announced one of Australia’s largest Social Impact Award. mining private equity fund), is a private philanthropic donations of member of the Board of The Centre for A$520 million, and have continued Committee memberships: Independent Studies and is a senior giving, with their total philanthropic Finance Committee (Chair), fellow at EY (Oceania). donations now exceeding A$2 billion. Nomination Committee Mr Barnaba holds a Bachelor of Dr Forrest recently completed a PhD Commerce (First Class Honours and in Marine Ecology and is passionate University Medal) from the University Mark Barnaba AM CitWA standards Setting high about ocean conservation. Prior to of Western Australia, an MBA from that he was awarded an honorary Lead Independent Director/ Harvard Business School (High doctorate by the University of Western Deputy Chair Distinction; Baker Scholar) and an

Australia. He is an Adjunct Professor of Honorary Doctor of Commerce from the Central South University in China Deputy Chair since November 2017; the University of Western Australia. and a lifetime Fellow of the Australian Lead Independent Director since He has lived in Australia, the United Institute of Mining and Metallurgy. November 2014; Non-Executive States, Italy, the United Kingdom and Director since February 2010. South Africa. In 2019, he was announced as an IUCN environment Safeguarding the Patron of Nature and is a member of Mr Barnaba is a career investment Committee memberships: the United Nations (UN) Environment banker, having focused predominatly Audit and Risk Management Programme Scientific Advisory in the natural resources sector. Committee (Chair), Nomination Committee on the Assessment on Mr Barnaba spent most of his career Committee, Remuneration and Marine Litter and Microplastics. with companies he founded, led and People Committee (Member), Finance Committee (Member) He is Co-Chairman of the Senior then sold – GEM Consulting and Business Leaders’ Forum, the leading Azure Capital (both independent formal dialogue for China and Australia’s corporate advisory firms which most senior business leaders. provide financial, corporate and change social Creating positive strategic advice to companies, In 2017, Dr Forrest was appointed governments and institutions in an Officer of the Order of Australia the Asia Pacific region), McKinsey (AO) for distinguished service to the & Company (both in Australia and mining sector, to the development overseas) and in several senior of employment and business executive roles at Macquarie Group opportunities, as a supporter of (one being the Chairman and sustainable foreign investment, and to philanthropy. Corporate Directory

Fortescue Metals Group Ltd Sustainability Report FY20 13 Overview | Operating and financial review

Elizabeth Gaines Lord Sebastian Coe CH, KBE Dr Jean Baderschneider

Chief Executive Officer/Managing Non-Executive Director Non-Executive Director Director Non-Executive Director since Non-Executive Director since Chief Executive Officer since February February 2018. January 2015. 2018 and Executive Director since Lord Coe is currently a senior February 2017; Former Non-Executive A highly regarded leader in both advisor with Morgan Stanley & Co Director from February 2013 to business and civil society, International plc and a February 2017. Dr Baderschneider brings 35 years’ Non-Executive Director of the Vitality of extensive international experience A highly experienced business Group of health and life insurance in procurement, strategic sourcing leader with extensive international companies. In 2017, he became and supply chain management along experience as a Chief Executive Chancellor of Loughborough with a deep understanding of Officer and group executive, University having previously served high-risk operations and locations Ms Gaines has a proven track record as Pro Chancellor of the University. and complex partnerships. in financial and operational leadership Based in the United Kingdom, Lord across a number of industries, Dr Baderschneider retired from Coe is the Non-Executive Chairman including resources, construction and ExxonMobil in 2013 where she of CSM Sport and Entertainment, infrastructure, financial services and was Vice-President of Global within the Chime Communications travel and hospitality. Procurement. During her 30-year group. He was elected President of career, she was responsible for After joining Fortescue as a Non- World Athletics in 2015 where he operations all over the world, Executive Director in February 2013, is driving significant governance including Africa, South America, the Ms Gaines was appointed Chief reforms through the organisation and Middle East and Asia. Financial Officer and Executive its 214 Member Federations around Director in February 2017. She is a the world. He is currently serving his A past member of the Board of former Chief Executive Officer of second term as President. Directors of the Institute for Supply Helloworld Limited and Heytesbury Pty Management and the Executive Lord Coe previously served as Limited and has also held the position Board of the National Minority Chairman of the British Olympic of Chief Financial Officer at Stella Supplier Development Council, Dr Association and was Chairman Group and Entertainment Rights plc. Baderschneider also served on the of the Organising Committee for boards of the Center of Advanced Ms Gaines was ranked second the London 2012 Olympic Games Purchasing Studies and the on the 2019 Fortune Magazine and Paralympic Games. He was a Procurement Council of both The Businessperson of the Year list, and member of the British athletics team Conference Board and the Corporate in 2020 the Chamber of Minerals and at the 1980 and 1984 Olympic Games Executive Board. Energy of Western Australia awarded where he won two gold and two her the ‘Women in Resources silver medals, as well as breaking In February 2011, she was the Champion’ at their annual Women in 12 world records. Presidential appointee to the US Resources Awards. Department of Commerce’s National In 1992, Lord Coe became a Member Advisory Council of Minority She has significant exposure of Parliament and during his political Business Enterprises. She holds a to the impact of the growth in career served as a Government Whip Master's Degree from the University Asian economies, particularly and then Private Secretary to William of Michigan and a PhD from Cornell China, on the Australian business Hague, Leader of the Opposition and University. environment and economy as well Leader of the Conservative Party. He as a deep understanding of all was appointed to the House of Lords Dr Baderschneider is the recipient of aspects of financial and commercial in 2000. Cornell’s Jerome Alpern Award and management at a senior executive the Nomi Network’s Corporate Social Committee memberships: level in both listed and private Responsibility Award. Nomination Committee (Chair) companies. Committee memberships: Ms Gaines holds a Bachelor of Audit and Risk Management Commerce and Masters of Applied Committee Finance and, in 2019, was awarded an Honorary Doctorate of Commerce by Curtin University. She is a member of Chartered Accountants Australia and Cameron Wilson New Zealand, the Australian Institute of Company Directors and Chief Company Secretary Executive Women. Mr Wilson was appointed Company Secretary in February 2018, bringing over Ms Gaines has previously held Non- 20 years’ mining industry experience across the gold, nickel, coal and mineral Executive Director roles with NEXTDC sands sectors. Limited, Mantra Group Limited, Nine Entertainment Co. Holdings Limited Mr Wilson holds a Bachelor of Laws from the University of Western Australia and ImpediMed Limited. and is a Graduate of the Australian Institute of Company Directors.

14 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

of the Financial Services Institute of Dr Zhang has served on the Board of Dr Cao Zhiqiang Australasia and a member of Chief Directors of Chinasoft International Ltd

Executive Women and Corporate (HKEX: 354) and AsiaInfo Technologies Operating Non-Executive Director Women Directors. Ltd (HKEX: 1675). He serves on the Board Non-Executive Director since of Stewardship for the Future of Mobility Other current directorships (ASX of the Davos World Economic Forum January 2018 (nominated director listed entities): from Hunan Valin Iron and Steel and Chairman of the Apollo Alliance, the Group Company Ltd). BlueScope Steel Limited (Non- largest open platform for autonomous driving in the world. Dr Zhang received Executive Director); Dexus Property sustainability Our approach to Dr Cao is currently the Chairman of Group (Non-Executive Director). his Bachelor’s and Master’s degree in Hunan Valin Iron and Steel Group Electrical Engineering from the University Company Ltd and brings extensive Committee memberships: of Science and Technology of China, experience in technology and steel Audit and Risk Management and a PhD in Electrical Engineering from mill management, along with a deep Committee (Member), Remuneration George Washington University. background in international and People Committee (Member), cooperation. Finance Committee (Member)

Dr Cao joined Valin Xiangtan Steel Jennifer Morris OAM Corporate Governance in 1997 and has worked in a variety Non-Executive Director of roles including Director of the Dr Ya-Qin Zhang Research and Development Centre, Non-Executive Director Non-Executive Director since before being appointed Chief November 2016. Executive Officer. He holds a PhD Non-Executive Director since Ms Morris is currently the National in Science and is a senior engineer August 2019. Director of Strategy for Cannings Purple, research fellow. Dr Ya-Qin Zhang is a renowned one of Australia’s leading

scientist, technologist and business fully integrated strategic stakeholders Engaging with executive. He is the founder and communications consultancies. Prior Penny Bingham-Hall Chairman of Blue Entropy LLC, a to joining Cannings Purple, Ms Morris Non-Executive Director Seattle-based technology consulting was a consulting partner at Deloitte, and firm. He joined Tsinghua University as more recently the CEO of Walk Free, the Non-Executive Director since the Chair Professor of AI Science in Minderoo Foundation’s global initiative November 2016. 2020, starting the Tsinghua Institute against slavery. She is currently a Non- for AI Industry Research (AIR). Dr Executive Director of the Australian Ms Bingham-Hall has over 30 years’ Zhang was President of Baidu Inc. Sports Commission. experience in senior executive and

(NASDAQ: BIDU) from September standards Setting high non-executive roles in large ASX 2014 to October 2019, a leading Ms Morris has key experience in listed companies. She is a Non- Chinese multinational technology advising government entities and Executive Director of Macquarie company specialising in Internet- corporations on strategy development, Specialised Asset Management, related services, mobility, artificial governance controls, complex Taronga Conservation Society intelligence and cloud computing. large scale business transformation, Australia, Supply Nation and the Prior to joining Baidu, he was a key the embedding of environment, social Crescent Foundation. She is also executive of Microsoft Corporation and governance policies and the Chair of the NSW Freight and for 16 years, including Corporate Vice understanding of high-performance

Logistics Council. President for Mobile and Embedded environments. environment Safeguarding the Ms Bingham-Hall has worked in Products, Managing Director of A former member of the Australian the construction, infrastructure, Microsoft Research Asia and Chairman Women’s Hockey Team, Ms Morris won mining and property industries of Microsoft China. Olympic gold medals at the Atlanta 1996 across Australia and the Asian Dr Zhang has made significant and Sydney 2000 Olympic Games. In region. She has a particular interest contributions to digital media, AI, 1997, she was awarded a Medal of the in environmental sustainability, autonomous driving and cloud Order of Australia (OAM). workplace safety and Indigenous computing industries, with over 60 Ms Morris is a member of the Australian

employment. change social Creating positive granted US patents, 500 Institute of Company Directors, a Prior to becoming a company peer-reviewed publications, Fellow of Leadership WA and a member director, Ms Bingham-Hall was and numerous contributions to of the Vice Chancellor’s List, Curtin Executive General Manager, Strategy international standards. Dr Zhang was University. She holds a Bachelor of Arts at Leighton Holdings (now CIMIC) inducted into the American Academy (Psychology and Journalism) received of Arts and Sciences (AAAS) in – Australia’s largest construction, with Distinction and has completed mining services and property group. 2019 and the Australian Academy of Finance for Executives at INSEAD. As part of the leadership team at Technology and Engineering (ATSE) as the only foreign fellow in 2017, and Committee memberships:

Leighton she had responsibilities Corporate Directory across the group’s Australian and became a Fellow of the Institute of Remuneration and People Committee Asian operations. Electrical and Electronics Engineers (Chair), Audit and Risk Management (IEEE) in 1997 at the age of 31, making Committee (Member) Ms Bingham-Hall has a Bachelor him the youngest scientist winning of Arts in Industrial Design, is a this honour in the 100+ year history of Fellow of the Australian Institute of the organisation. Company Directors, a Senior Fellow Fortescue Metals Group Ltd Sustainability Report FY20 15 Overview | Operating and financial review

Core Leadership Team

L to R: CEO Elizabeth Gaines, Deputy CEO Julie Shuttleworth, COO Greg Lilleyman, CFO Ian Wells.

Elizabeth Gaines Greg Lilleyman Chief Executive Officer Chief Operating Officer

Ms Gaines commenced as Chief Mr Lilleyman commenced as Chief Executive Officer in February 2018. Operating Officer in February 2018, after joining Fortescue as Director A highly experienced business Operations in January 2017. leader with extensive international experience as a Chief Executive With three decades of extensive Officer and group executive, international experience in the mining Ms Gaines has a proven track sector, across multiple commodities in record in financial and operational large scale project development and leadership across a number of construction, operational and business industries, including resources, leadership, joint venture management construction and infrastructure, and technology deployment, financial services and travel Mr Lilleyman brings significant business and hospitality. credentials and over 20 years' iron ore market knowledge to Fortescue’s Core After joining Fortescue as a Leadership Team. Non-Executive Director in February 2013, Ms Gaines was appointed Mr Lilleyman holds a Bachelor of Chief Financial Officer and Executive Construction Engineering from Curtin Director in February 2017. She is a University and has completed the former Chief Executive Officer of Vincent Fairfax Fellowship in Ethical Helloworld Limited and Heytesbury Leadership at the University of Pty Limited and has also held the Melbourne, as well as the prestigious position of Chief Financial Officer Wharton Business School’s Advanced at Stella Group and Entertainment Management Program. Rights plc. He is a member of the Australian Ms Gaines holds a Bachelor of Institute of Mining and Metallurgy, Commerce and Masters of Applied the Australian Institute of Company Finance and, in 2019, was awarded Directors and a Fellow of the Australian an Honorary Doctorate of Institute of Management. Mr Lilleyman Commerce by Curtin University. has recently been appointed to the She is a member of Chartered Board of the University of Western Accountants Australia and New Australia Business School. Zealand, the Australian Institute of Company Directors and Chief Executive Women.

16 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

Operating

sustainability Our approach to

Corporate Governance

Ian Wells Julie Shuttleworth Chief Financial Officer Deputy Chief Executive Officer

Mr Wells commenced as Chief Financial Ms Shuttleworth commenced as Deputy stakeholders Engaging with Officer in February 2018 having responsibility Chief Executive Officer in February 2018. for the Fortescue Group capital management strategy, core finance functions including Having joined Fortescue in 2013, reporting, tax and treasury, together Ms Shuttleworth has held General with Group procurement and logistics, Manager roles at both Fortescue’s and technology and autonomy. Mr Wells Cloudbreak and Solomon mines. is a Director of a number of Fortescue’s Ms Shuttleworth holds a double major subsidiaries and is a member and in Extractive Metallurgy and Chemistry alternate chair of the Iron Bridge Joint from Murdoch University and has 26 standards Setting high Venture Committee. years’ experience in the mining industry Since joining Fortescue in 2010, he has in Australia, China, Tanzania and South America, including 19 years in gold/ held multiple senior executive roles in the Group Finance Leadership team, including copper working for Newcrest Mining, Group Manager Corporate Finance, Sino Mining and Barrick Gold, leading Fortescue’s capital management and seven years’ iron ore experience strategy, Group Manager Planning and with Fortescue. Analysis and he also held the position of Ms Shuttleworth is a Fellow and environment Safeguarding the Company Secretary. Chartered Professional of the Mr Wells’ prior experience includes Australasian Institute of Mining and financing Fortescue’s major iron ore Metallurgy, a Graduate Member of project development, leading multi-billion the Australian Institute of Company dollar capital raising and refinancing Directors, a member of Chief Executive transactions in domestic and international Women, a member of the Institution of capital markets. Engineers Australia and she is on the International Committee of the Society social change social Creating positive With more than 25 years’ experience as a for Mining, Metallurgy and Exploration. senior executive in leading ASX listed and She has attended Harvard Business private companies in the mining, energy School and INSEAD Business School, infrastructure and healthcare industries, holds diplomas in Financial Markets Mr Wells’ prior positions include Chief and Management, and sponsors the Financial Officer of Singapore Power Julie Shuttleworth Prize in Mineral subsidiary Jemena Limited and Acting Processing at Murdoch University. Chief Financial Officer of Alinta Limited. Corporate Directory Mr Wells holds a Bachelor of Business in Accounting, is a Fellow of CPA Australia, a Certified Finance and Treasury Professional and a Graduate of the Australian Institute of Company Directors. Mr Wells is Chairman of The Salvation Army’s WA Corporate & Philanthropic Council. Fortescue Metals Group Ltd Sustainability Report FY20 17 Overview | Operating and financial review

Executive team

Fortescue’s Executive Team is accountable for the safety of its people, upholding the Company’s Values, and acting with integrity and honesty.

Danny Goeman Peter Huston Don Hyma Director Sales and Marketing Director Corporate Development, Director Projects Legal and Strategy

Tim Langmead Linda O’Farrell Fernando Pereira Director Community, Environment Director Fortescue People Director Pilbara Operations and Government

Alison Terry Rob Watson Director Sustainability and Director Health and Safety Corporate Affairs and Joint Company Secretary

18 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

Pilbara Growth in Western Australia, Operations and Asset Management Danny Goeman as well as Chief Technical Officer teams.

for Mitsui & Co. He has extensive Operating Director Sales and Marketing experience in managing large, Mr Pereira has more than 19 years’ experience in the mining industry, Mr Goeman was appointed Director complex capital projects, particularly those implemented under joint spanning various commodities and

Sales and Marketing in August 2018. ventures and involving multiple operations in Australia and South Mr Goeman has more than 25 years stakeholders. America. He has expertise in senior of experience in management, sales management, mining and mineral sustainability Our approach to and marketing, strategy development engineering, supply chain optimisation and overseeing mechanical, structural and high level commercial Tim Langmead negotiations including more than and expansion projects. 20 years with the Rio Tinto group Director Community, Environment Mr Pereira holds a Bachelor in Mining of companies. and Government

and Mineral Processing Engineering Mr Goeman has a wealth of Mr Langmead joined Fortescue as with a specialisation in Business experience in leading commercial Group Manager Corporate Affairs in Management. transactions in different regions January 2013 and from January 2014 Corporate Governance including Australia, Asia, Europe served as Director External Relations and Africa, and has experience in before being appointed to his Alison Terry a range of commodities including current role. Director Sustainability and Corporate diamonds, iron ore, coal and potash. Previously, Mr Langmead held Affairs and Joint Company Secretary Mr Goeman has a Master's degree in senior corporate affairs roles in the Business Administration. Australian business units of global oil Ms Terry joined Fortescue in 2014 as and gas companies. Mr Langmead Group Manager Corporate Affairs and serves as Joint Company Secretary, served in senior staff roles for stakeholders Engaging with Peter Huston Ministers in the Howard-Anderson having been appointed to the role in February 2017. Director Corporate Development, and Howard-Vaile governments Legal and Strategy and commenced his career as an With significant experience in agribusiness journalist. corporate affairs, legal, company Mr Huston joined Fortescue in 2005 secretarial and general management, and has over 20 years’ experience in Ms Terry has previously held senior legal and corporate advisory roles. Linda O’Farrell executive and Board roles across Prior to joining Fortescue, a number of sectors including Mr Huston spent 12 years as a Director Fortescue People automotive, telecommunications and standards Setting high Partner of the law firm now known superannuation. Ms Terry holds a as Norton Rose Fulbright. He then Ms O’Farrell joined Fortescue in Bachelor of Economics and Bachelor spent over a decade in Activist October 2013 as Group Manager Fortescue People, joining the of Laws (Honours) and a Graduate

Private Equity as an Executive Diploma of Business (Accounting). Director at Troika Securities Limited. Executive team in December 2014. She is a member of Chief Executive Mr Huston is admitted as a Solicitor Having held a number of executive Women, a Graduate of the Australian and Barrister of the Supreme Court human resources roles in major Institute of Company Directors and of Western Australia, the Federal and Australian resource companies, a Director of the Black Swan State environment Safeguarding the High Court of Australia and has a Ms O’Farrell brings deep experience Theatre Company of Western Australia. Bachelor of Jurisprudence, Bachelor in strategic people management, diversity and Aboriginal employment. of Laws (with Honours), Bachelor of Commerce and a Master of Laws. Ms O’Farrell holds a Bachelor of Rob Watson Economics (Honours in Industrial

Relations) from the University Director Health and Safety Don Hyma of Western Australia. She is a Mr Watson was appointed Director Director at the Australian Institute Health and Safety in July 2020 after Director Projects change social Creating positive of Management Western Australia joining Fortescue in 2011. Prior to this, Mr Hyma joined Fortescue in early (AMMA), the Australian Resources Mr Watson spent 15 years in a number 2019 as Project Director Iron Bridge and Energy Group and Lifeline of senior corporate health and safety before moving into the role of Australia. roles in large mining companies. Director Projects in October 2019.

He has over 25 years of progressive Mr Watson’s career in health and capital project experience in the Fernando Pereira safety spans over 25 years in a number resources sector in Canada, Chile, of industries and commodities. New Caledonia and Australia. Director Pilbara Operations

Mr Watson holds a Master's in Corporate Directory Occupational Health and Safety. Prior to joining Fortescue, Mr Mr Pereira was appointed Director Hyma held senior management Pilbara Operations in June 2019, positions with Rio Tinto, including having started his career at Vice President Projects Iron Ore Fortescue in 2010 and has previously in Canada and General Manager led the Company’s Port and Rail

Fortescue Metals Group Ltd Sustainability Report FY20 19 Overview | Operating and financial review

US$ US$ 178.2 mt 12.94/wmt 4. 9 bn Shipped C1 costs Cash on hand

US$ US$ US$ 12.8 bn 5.1 bn 0.3 bn Revenue Gross debt Net debt

02 Operating and financial review and financial review | Overview

Operating Overview of operations

As one of the world’s largest producers of iron ore, Fortescue’s wholly owned sustainability Our approach to and integrated operations in the Pilbara include the Chichester and Solomon mining hubs and the Western Hub, which is currently under development. Our mining infrastructure is connected to the five berth Herb Elliott Port and Judith Street Harbour towage facility in Port Hedland via the fastest, heavy haul railway in the world. Corporate Governance

Chichester Hub Solomon Hub Hedland Operations Our Chichester Hub in the The Solomon Hub in the Hamersley Fortescue wholly owns and operates Chichester Ranges, comprising the Ranges is located 60km north of our purpose designed rail and port Cloudbreak and Christmas Creek Tom Price and 120km to the west of facilities, constructed to deliver iron mines, has an annual production our Chichester Hub. It comprises the ore from our mines to Port Hedland for capacity of approximately 100mtpa Firetail and Kings Valley mines which shipment to our customers. Covering

from three Ore Processing Facilities together have a production capacity 620km of track, with the additional stakeholders Engaging with (OPFs). of 75mtpa. 143km under construction for Eliwana, our railway is the fastest, heavy haul Consistent and sustained output Solomon represents a valuable line in the world. delivered from the OPFs has allowed source of production by blending

us to optimise our product strategy higher iron grade, low cost The efficient design and layout, optimal through enhanced blending and Firetail ore with low phosphorous berthing configuration and ongoing beneficiation, increasing iron Chichester ore to create Fortescue innovation to increase productivity upgrades and reducing impurities. Blend. The current operation will makes Fortescue’s Herb Elliott Port the This has contributed to lower expand to include the Queens Valley most efficient bulk port operation in mining cut-off grades, as we mining area to maintain production Australia. The port has five operating standards Setting high optimise ore bodies with sustainably of the Kings Fines product. berths with our current infrastructure lower strip ratios. capable of safely and efficiently Western Hub exporting in excess of 180mtpa. The Christmas Creek OPF infrastructure is being upgraded Fortescue is developing the Western The Judith Street Harbour towage to include a Wet High Intensity Hub, which includes significant infrastructure and our fleet of tugs Magnetic Separator (WHIMS) plant amounts of high iron content bedded provides safe and reliable towage to further maximise production rates iron ore and will be home to the services that maximise the efficiency and enhance the value of our ore. Eliwana mine. Located 140km to of our operations, while offering environment Safeguarding the The WHIMS construction will be the west of Solomon and due to be competitive third party towage services completed by the end of 2020. completed in December 2020, the within the port. Eliwana project includes 143km of Cloudbreak utilises relocatable rail and a 30mtpa dry OPF. conveyors which can be moved, lengthened or shortened once an Eliwana will contribute to Fortescue’s area is mined. The conveyors core iron ore business as it now cover 10km, extended from underpins the ramp up of our the initial 5km length due to the 60.1% Fe West Pilbara Fines product. change social Creating positive success and efficiency of this The operation will maintain our innovative infrastructure. low cost status, providing greater flexibility to capitalise on market dynamics.

Corporate Directory

Fortescue Metals Group Ltd Sustainability Report FY20 21 Overview | Operating and financial review

ort edland E EO O oebourne Concentrate pipeline arratha

arble ar O DGE

ilbara SOOO ullagine CCESE estern ustralia Eliwana iretail Cloudbreak Current operations ings and ueens Christmas Creek nder development ESE om rice DG

ewman

Shipping Sales and marketing When our Train Control Centre Designed to complement our port Fortescue has an integrated opened in 2009, we were the first infrastructure, the fleet of eight operating and marketing strategy, operation in Western Australia to 260,000 tonne capacity Fortescue focused on meeting the needs of our control a railway from outside the Ore Carriers deliver approximately customers while maximising value. region. Now known as the Fortescue 14 per cent of our shipping In 2019, we established FMG Trading, Hive, the expanded, purpose-built requirements, while improving load a wholly owned Chinese sales entity remote operations facility was rates, efficiencies and reducing which supplies our products directly opened in 2020 and includes our operating costs. Our shipping fleet to Chinese steel mills from regional planning, operations and mine completes our mine to market ports. control teams, together with port, supply chain. rail, shipping and marketing teams. The introduction of portside sales The newly refurbished space allows Iron Bridge Magnetite has allowed us to enhance our team members across our complete Project service to small and medium-sized supply chain to work together, 24 customers through direct supply hours a day, seven days a week, to The US$2.6 billion Iron Bridge in renminbi from regional Chinese deliver improved safety, reliability, Magnetite Project is under ports, complementing our existing efficiency and commercial outcomes. development and will deliver 22mtpa contractual seaborne arrangements. of high grade 67% Fe magnetite concentrate product, further World leading technology enhancing the range of products Fortescue was the first company available to our customers. The Fortescue Hive underpins in the world to deploy Caterpillar our future use of technology Iron Bridge, located 145km south (CAT) autonomous haulage on a of Port Hedland and incorporating commercial scale when trucks fitted including artificial intelligence the world class North Star and with autonomous haulage system and robotics and will evolve (AHS) technology began operating Glacier Valley Magnetite ore bodies, to include the generation and is an unincorporated joint venture at the Solomon Hub in 2012. Today, between Fortescue’s subsidiary FMG our AHS deployment represents integrated distribution network Iron Bridge and Formosa Steel IB. the largest fleet conversion to for the Pilbara Energy Baosteel also has an interest in the autonomous haulage in the industry Project, as a minority shareholder of and demonstrates our unique Connect, our hybrid solar gas FMG Iron Bridge. capability to manage and operate a power solution. multi-class truck size autonomous The innovative process design, haulage site. including the use of a dry crushing and grinding circuit, will deliver globally competitive capital intensity and operating costs.

22 Fortescue Metals Group Ltd Sustainability Report FY20 and financial review | Overview

Operating

sustainability Our approach to

Corporate Governance

Energy infrastructure Exploration International footprint Since October 2019, Fortescue Fortescue began as an exploration We recognise that early stage and our partners have announced company and today our iron ore exploration can unlock significant stakeholders Engaging with investments in excess of tenements remain key to maintaining value and our world class exploration US$800 million in significant energy mine life and sustaining product capability is driving future growth infrastructure projects which will quality in our core iron ore business. as we target global opportunities increase our use of renewable and commodities that support energy, a key contributor to our The resources in the Western Hub decarbonisation and electrification of pathway to achieve our emissions and Solomon Hub add high iron the transport sector. reduction targets. content, dry, low cost tonnes to our product suite, providing further Fortescue has a well-established

The Pilbara Energy Connect (PEC), optionality for the business. presence in Ecuador, where we standards Setting high together with the Chichester Solar have concessions prospective for Gas Hybrid Project, will deliver Recent Australian exploration copper in exploration phase covering 25 to 30 per cent of our stationary activity has been primarily focused 135,000 hectares and in Argentina on early stage target generation for energy requirements from solar we currently hold 450,000 hectares power. The PEC leverages existing copper-gold in the Paterson and of tenements, prospective for assets and provides Fortescue with Rudall regions in Western Australia, copper-gold. a hybrid solar gas energy solution with additional exploration activity that enables the delivery of stable, underway in New South Wales and We are also assessing exploration low cost power and supports the South Australia. and development opportunities in environment Safeguarding the incorporation of additional large Colombia, Chile and Peru, as well as scale renewable energy in the future. Portugal and Kazakhstan.

The new infrastructure builds on our previous energy initiatives including the construction of the Fortescue River Gas Pipeline, the conversion of the Solomon

Power Station from diesel to gas change social Creating positive generation, as well as a partnership agreement with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to develop and commercialise hydrogen technology.

Corporate Directory

Fortescue Metals Group Ltd Sustainability Report FY20 23 Our approach to sustainability

In its short history, Fortescue has accomplished what was judged as impossible: to build a company from a start up to a global leader in the mining industry.

2003 2006 2008 2011

Fortescue’s Vocational A$150,000 Community Commenced the Billion THE Training and Employment Grants Program established Opportunities Program DREAM Centre (VTEC) established BEGINS

2013 2015 2016 2017

Billion Opportunities Northern Spirits recognition Commitment to the UNGC Published inaugural Corporate Program reached program established Principles and SDGs Social Responsibility Report A$1 billion in contracts Tenth anniversary of Fortescue Family Room at the Fortescue’s VTEC Fortescue Centre in Perth opened Board reached gender parity Climate Change Committee established Audit and Risk Management Committee assigned responsibility for overseeing material issues and sustainability targets

2017 2018 2019 2020

Partnered with ANZ to Landmark hydrogen Chichester Solar Gas Hybrid Fortescue’s VTEC celebrated initiate a A$50 million partnership with Project announced its 900th job for Aboriginal funding scheme for CSIRO announced people Signed ParityPledge Aboriginal businesses Dedicated Modern Slavery Formation of a Sustainability Established In-Home Committee and Working Committee and dedicated Childcare for Port Hedland Group established Plastics Reduction Committee employees Published inaugural Modern Published inaugural Climate Added to Dow Jones Slavery Statement Change Report Sustainability World Index

THE JOURNEY CONTINUES

24 Fortescue Metals Group Ltd Sustainability Report FY20 03 Our approach to sustainability

Our Values form the foundation of our approach to sustainability Our approach to sustainability

Our approach to sustainability

Sustainability is integrated into The Value of empowerment opportunities and objectives. These all aspects of our business. encourages our employees to do inform specific targets, processes and At the heart of our approach to their best and to find innovative plans set by our business units. sustainability is a commitment to solutions to business and societal create value for our stakeholders, challenges. By empowering our Compliance with all relevant protect the health and safety of our communities through training, legislation and obligations including Fortescue family and support the development, employment and those that govern health, safety and communities and environments in business opportunities, we can environment is the absolute minimum which we operate. assist them to thrive and prosper. standard at which we operate.

Our Values form the foundation Our Board approved Code of Our Board is responsible for the of our approach to sustainability Conduct and Integrity establishes oversight of all sustainability issues, and integrity is key to building the essential standards of personal receiving regular updates through trust with our stakeholders, setting and corporate conduct of our the Audit and Risk Management the ethical and moral compass employees, suppliers, contractors Committee (ARMC). At the operational by which we operate. Integrity and all those with whom we do level, sustainability is managed by our inspires our people to do what we business. This strong base supports Chief Executive Officer with support say we are going to do and to be our commitments and principles from the Core Leadership Team accountable for the impact of which leads to the development and the Director Sustainability and our activities on the community and implementation of policies, Corporate Affairs. and environment.

Targets

Opportunities and objectives

Fortescue’s policies

Voluntary commitments and principles

Code of Conduct and Integrity

Vision and Values

26 Fortescue Metals Group Ltd Sustainability Report FY20 Overview | Operating Our approach to Corporate Governance Engaging with Setting high Safeguarding the Creating positive Corporate Directory and financial review sustainability stakeholders standards environment social change 27 Fortescue Metals Group Ltd Sustainability Report Ltd FY20 Group Fortescue Metals

The United Nations Sustainable Sustainable Nations United The adopted Goals (SDGs) Development United Nations Sustainable Development Goals Development Sustainable Nations United in 2015, set for 2030in 2015, the agenda global development. SDGs The sustainable global action a call for by national are protect end poverty, to governments all people are ensure and to planet the enjoy peaceable to and prosperity. approach aligned Fortescue’s have We and SDGs the with sustainability to our host with work to will continue meet to they strive as governments these goals. on pages table The 27 29 to our sustainability how summarises the towards contributing are targets of SDGs.achievement the of Eight the by Fortescue. prioritised are SDGs Our priorityOur SDGs Our approach to sustainability Material issues

This report discusses the issues identified through an annual During FY20, our materiality that may impact Fortescue’s assessment process that considers assessment considered the ability to meet its sustainability risks and opportunities, as well following: commitments and targets. as internal and external stakeholder • Our sustainability initiatives views. and targets Material issues are those that may have a significant bearing on our The assessment involves a cycle of • Corporate risk assessments ability to achieve our commitments research, identification, prioritisation, • Company policies, standards and targets. These issues are validation and review. and guidelines • Results of internal and external engagement with stakeholders • Media and investor interest and feedback 1 • Material issues identified by 5 Research peers, sustainability leaders and Review materiality analysis • Benchmarking and environmental, social and governance assessments.

Priorities were informed by internal 4 and external engagement which Validation 2 included workshops with our employees and a broad range of Identification external stakeholders. Materiality was validated by subject leaders and 3 the Executive team, with 11 issues determined to be material. Prioritisation

Material issues are incorporated under our three core sustainability pillars.

Setting high Safeguarding Creating positive standards the environment social change

• Employee health and safety • Climate change action and • Creating employment and • Economic contribution disclosure business opportunities for Aboriginal people • Workforce diversity • Protecting biodiversity and water resources • Building sustainable communities • Protecting Aboriginal heritage • Tailings management • Human rights • Ethical business conduct

28 Fortescue Metals Group Ltd Sustainability Report FY20 Overview | Operating Our approach to Corporate Governance Engaging with Setting high Safeguarding the Creating positive Corporate Directory and financial review sustainability stakeholders standards environment social change 29 SDGs 41 41 47 45 100 Page Page Page Page Page Page Page Page 60-61 57-59 50-55 50-55 Pages Pages Pages Pages Pages Pages Pages Pages Location

Fortescue Metals Group Ltd Sustainability Report Ltd FY20 Group Fortescue Metals Target not met Target

Result participation survey participation rate female employment in female senior roles leadership Zero reportable heritage incidents 0.5% 19% employment female 25% employment in female roles and above manager 26% Zero fatalities Workplace 2.4 TRIFR 96% positive alcohol and positive results test illicit drug Programs supported Programs Hedland include Port and Roebourne Refuge Women’s a with training Targeted on leaders.focus Auditing conduct ethical ensure to

Target in progress Target programs empowering women women empowering programs and ending discrimination Fortescue has ensure Annually, no impact heritage on Aboriginal with without consultation peopleAboriginal conduct ethical ensure Annually, by targeting maintained is training, programs, leadership performance assessments and remuneration By 2020, achieve an employment By 2020, of in manager 30% females rate and above roles support community ledAnnually, Annual decrease in positive decrease Annual alcohol results and illicit test drug achieve a female By 2020, of 25% employment rate By 2020, reduce injuries to lowest lowest reduce injuries to By 2020, TRIFR and severity quartile of resources industry quartile Annually achieve top Safety Excellence and Culture Survey results Annually, achieve zero fatalities fatalities achieve zero Annually, operations Fortescue’s at Target

Target met Target Ethical Ethical conduct and anti-bribery and corruption Protecting Protecting Aboriginal heritage Workforce Workforce diversity Employee safety health, and wellbeing Our material issues, related targets and links to SDGs and links to targets issues, related material Our Our approach to sustainability Our material issues, related targets and links to SDGs continued

Target Result Location SDGs

Achieve a net positive impact Pages Ongoing program on biodiversity 71-73

Annually, achieve zero significant Zero Pages environmental incidents significant environmen- 71-73 tal incidents Initiate, host and coordinate a series of Mine Water Management Forums about Mine water management Pages the Pilbara Region of WA to forum postponed due to 74-78 encourage the sharing of the COVID-19 pandemic learnings for practitioners and regulators Protecting Ensure at least 75% of dewatered biodiversity water at the Cloudbreak and 99% and water Christmas Creek mine sites is of dewatered water Pages resources used for beneficial purposes used for beneficial 74-78 or reinjected via the Managed purposes or reinjected Aquifer Recharge program Annually, ensure we adequately Mine closure plans comply with all relevant legal Page prepared and financial obligations and commitments 79 provisions made once mining is complete By the end of FY20, identify a Liaising with multiple sustainable disposal method Pages vendors to implement a for off-the-road tyres and 83-84 disposal method conveyor belt

By the end of FY20, investigate Pages composting opportunities for Investigations underway 83-84 food related mine wastes

Building Annually, achieve at least 6% Page sustainable 5% of actual spend with of actual spend with 96 communities local Pilbara suppliers local Pilbara suppliers

Note: Performance against Climate Change action and disclosure is detailed in our FY20 Climate Change Report, which is available on our website at www.fmgl.com.au

30 Fortescue Metals Group Ltd Sustainability Report FY20 Overview | Operating Our approach to Corporate Governance Engaging with Setting high Safeguarding the Creating positive Corporate Directory and financial review sustainability stakeholders standards environment social change 31 SDGs 92 92 Page Page Page 90-92 90-92 90-92 90-92 86-89 Pages Pages Pages Pages Pages Pages Pages 104-105 Location

Fortescue Metals Group Ltd Sustainability Report Ltd FY20 Group Fortescue Metals

Target not met Target

Result of Aboriginal employeesof Aboriginal hold skilled trade positions 6% spend of total with procurement businesses Aboriginal 10% employment rate 4% 23% of leadership roles held roles of leadership peopleby Aboriginal Ongoing active active Ongoing including engagement on modern slavery in chain. supply the Ongoing contribution to to contribution Ongoing including policy debate of Council Business initiatives Australia supported Programs hARTinclude Big and Jawun

Target in progress Target Active engagement on human on human Active engagement in business issues rights By 2022, achieve an employment of people 20% Aboriginal for rate in skilled trades policy in the involvement Annual address Aboriginal to debate disparity two least deliver at Annually, communitymajor projects with partners stakeholder Aboriginal By 2020, achieve an employment By 2020, of people 20% Aboriginal for rate across Fortescue achieve an employment By 2020, people of Aboriginal 10% for rate roles in leadership By 2021, achieve a spend ofBy 2021, with procurement 10% of total businesses,Aboriginal with 50% number of of the contracts businesses to more with awarded 50% ownership Aboriginal than Target

Target met Target Human Human Rights Creating Creating opportunities for Aboriginal people Our material issues, related targets and links to SDGs continued SDGs and links to targets issues, related material Our Corporate Governance

04 Corporate Governance

32 Fortescue Metals Group Ltd Sustainability Report FY20 Overview | Operating Our approach to Corporate Governance Engaging with Setting high Safeguarding the Creating positive Corporate Directory and financial review sustainability stakeholders standards environment social change 33

ittee inatin inatin O O inance inance ittee ittee Stewardship a company Developing and maintaining Fortescuewide recognition that benefit the for managed is of its account the taking into shareholders, of stakeholders. other interests Empowerment everyone FortescueEnsuring at is decisions that make to empowered support our objectives in the and are of stakeholders.best interests and employees are Management and be innovative to encouraged align decisions that in making strategic undertaken appetite and are our risk with corporate with consistent in a manner expectations and standards. accountability Corporate clarity is of there decision that Ensuring making, processes with to in place people make right to the authorise effective and efficient and decisions consequences delivered appropriate these processeswhen not followed. are O O O Fortescue Metals Group Ltd Sustainability Report Ltd FY20 Group Fortescue Metals O O O O O O O eple ittee eple eneratin and eneratin OO OO O O

ittee

O O anageent anageent

O dit and i and i dit O O

Transparency Being clear and unambiguous and about operations our structure, performance, both externally and a genuine and maintaining internally, insight and providing dialogue with, market and the stakeholders to, generally. Integrity a Developing and maintaining to committed culture corporate and compliance behaviour ethical law. the with Fortescue supports of intent the of Australian Edition the 4th the Securities Exchange (ASX) Corporate Corporate Council’s Governance and Principles Governance and (Principles Recommendations otherwise Unless Recommendations). disclosed, Fortescue reported has of revised the requirements against and Recommendations. Principles the principles of cornerstone Our are: governance corporate

Fortescue seeks adopt to practice, leading contemporary governance and standards apply in a these consistent manner our culture with and Values. Overview of Corporate Governance Overview of Corporate Good corporate Good corporate critical is governance long-term, the to sustainable success of Fortescue. Good governance collective the is responsibility of of Board the Directors (the Board) and all levels of management. Engaging with stakeholders Fortescue is committed to building and maintaining constructive relationships with stakeholders

05 Engaging with stakeholders

34 Fortescue Metals Group Ltd Sustainability Report FY20 Overview | Operating Our approach to Corporate Governance Engaging with Setting high Safeguarding the Creating positive Corporate Directory and financial review sustainability stakeholders standards environment social change 35 commitments and performance. supported is This by communication media year via the throughout publications, company statements, Meeting, our General our Annual with and engagement website specific form stakeholders. The and frequency is of engagement and the stakeholder on the dependent A summary of them. to relevant issues interests their our key stakeholders, is methods of engagement and main pages.detailed following on the Fortescue Metals Group Ltd Sustainability Report Ltd FY20 Group Fortescue Metals Regular engagement including face to face and face to including face Regular engagement electronic communication In-country presence offices with and in Shanghai Singapore Quality of product control Sales and skilledHighly and knowledgeable team Marketing negotiations and agreement Contract OpenedChina our new office in Shanghai, Fostering a supportive and inclusive culture which which a supportive culture Fostering and inclusive participationencourages guidance and essential Regular communication COVID-19 the provided pandemic during of company including whole open engagement Regular, Senior Forums, meetings, face Values weekly to face and electronic communication Leader Forums Regular review of revision and policies and standards opportunities feedback,Providing for our including Safetyannual Excellence Survey and Culture development and professional Training feedback and key (SuccessPerformance Factors) performance (KPIs) indicators mechanisms and grievance Complaints negotiations and contract Collective bargaining Engagement/response • • • • • • • • • • • • • • • Engagement/response Stakeholders are identified are according Stakeholders level their ofto interest, potential impacts and opportunities, and we those with who engaging prioritise be directlymay impacted by our activities. resolve grievances in a to work We manner and accountable transparent feedback,and implement monitoring processes and evaluation ensure to improve. continuously can we reportThis provides mechanism a key disclosingfor our sustainability

Customers Employees

Ensuring a safe workplace a safe Ensuring and unique culture a strong Building career through workplace a rewarding Fostering development, opportunities promotional and Colours and includes True This recognition. leadership various and awards Northern Spirits development programs and diversity inclusion Equal opportunity, employment and flexible conditions Strong working arrangements business and ethical governance Good corporate practices Key interests Key interests Safe, reliable and consistent supply and delivery supply and consistent ofSafe, reliable products Economic business activity sustainable through development procurement through communication Transparent sourcing and responsible Ethical and commercial technical of strong Maintenance open and honest timely, through relationships communication • • • • • • • • • • • Our key stakeholders stakeholders key Our

Our engagement is underpinned is engagement Our of integrity and Value by the Engagement our Stakeholder regular, ensures which Framework and inclusive open, transparent communication. number of a large with engage We including investors, stakeholders, communityregulators, members, and industry peerscustomers and Engaging with stakeholders with Engaging meaningful regular, ensure to work we and trust builds that engagement respect. Engaging with stakeholders

Shareholders, investors and analysts