Innovation powers multi-mine, multi-hub Force Presentation to Sydney Mining Club, November 12, 2009 Fortescue Metals Group DISCLAIMER - Important Notice The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation. This presentation contains certain statements which may constitute "forward-looking statements". Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward-looking statements. No representation or warranty, express or implied, is made by Fortescue that the material contained in this presentation will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of Fortescue, its officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this presentation and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. Fortescue accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person nor any obligation to furnish the person with any further information. Competent Persons Statement The geological information in this presentation is based on information compiled by Mr Stuart Robinson, and by Dr John Clout. Mr Robinson and Dr Clout are both fellows of The Australasian Institute of Mining and Metallurgy and are both employees of Fortescue Metals Group Ltd. Mr Robinson and Dr Clout both have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for reporting of Exploration results, Mineral Resources and Ore Reserves’. Mr Robinson and Dr Clout consent to the inclusion in this presentation of the matters based on the information in the form and context in which it appears. Overview Last quarterly – key points • Record quarterly shipments of 9.526 million tonnes • Larger more efficient Surface Miner introduced • Efficiencies increasing with continued cost focus • Strong cash position of US$704 million • Second processing plant commitment optimises Chichester Hub Low cost operation – >42mt shipped Innovation: fast, reliable ramp up 50,000 45,000 FMG Cloudbreak 40,000 35,000 30,000 25,000 20,000 15,000 Annual Production Annual (kt) 10,000 5,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 RIO Hope Downs RIO IOC (pellets and concentrate) RIO Robe River RIO Channar RIO Eastern Range BHP Mt Newman Joint Venture BHP Goldsworthy Joint Venture BHP Area C Joint Venture BHP Yandi Joint Venture BHP Jimblebar BHP Samarco FMG Cloudbreak Source: Credit Suisse estimates Summary - 55mtpa run rate and growing • 18 months of highly efficient ramp up • On track for 55mtpa run rate by end 2010 • 95mtpa from Chichester Hub advancing • Solomon Hub under fast-track management, initially 60mtpa, then expanding • Infrastructure planned to 155mtpa • Strong balance sheet Technical innovation drove success • A new exploration model – microplaty hematite and supergene ores below cover • A new mining production method – surface miners • Overburden removal – New fully automated single handle conveyor overburden removal system • 40 tonne axle loads for the heavy haul railway • A high capacity, highly automated, blending port facility Innovation drove success • A new product – ‘Rocket Fines’ • Innovation – Design of the flowsheet reduced footprint size but significantly increased capacity • Low capex / tonne – Compared to the last major wet plant built in the Pilbara, the Desand Plant is half the price – and double the capacity (and built >10 years later!) World class asset operating low on the cost curve Iron Ore Cash Costs for 2009 - Saleable Mine and Pellet by Company 90 Port Costs 80 Royalties Transport Pelletizing 70 Processing Mining 60 Pellets LKAB: 50 Vale:Pellets 40 30 &PF Fines Lumps, BHPBilliton: Fortescue Metals: Lumps, Fines Rio Tinto: Lumps, Fines &PF Fines RioLumps, Tinto: Vale: Lumps, Fines &PF Vale:Fines Lumps, 20 10 US$/dry in terms real tonne US$/dry 0 0 200 400 600 800 1,000 Cumulative Production Capability - wet Mt Chichester and Solomon ore bodies Investigator Firetail Solomon East Serenity Cloudbreak Christmas Creek Chichester Hub 1 Port Hedland Bedded Iron Deposits Channel Iron Deposits Chichester – forging on to Solomon 95mtpa Hub Chichester Hub Chichester hub – current status Optimising Cloudbreak operations • Record quarterly shipments of 9.526 million tonnes • Efficiencies increasing with continued cost focus – US$26.60 / ton • Focus on safety and organisational foundations Ore mined Ore processed Ore shipped Mt (wet) Mt (wet) Mt (wet) 12 12 12 10 10 10 8 8 8 6 6 6 4 4 4 2 2 2 0 0 0 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 09 09 09 09 10 09 09 09 09 10 09 09 09 09 10 Predictable ramp up growth Q3FY10 target 42 mtpa Current 38 mtpa Pit operations Employing techniques matched to our ore body characteristics Overburden trucks Excavator Surface miner OVERBURDEN Ore trucks ORE BODY Innovation: Surface mining operations then Innovation: Surface mining operations now Innovation: Overburden removal Development of leading solutions to dramatically reduce cost Innovation: Pilbara’s largest ore processing plant OPF average daily production – rising 120,000 100,000 80,000 Tonnes per day 60,000 40,000 20,000 0 Q4 FY08 Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Train load out – highly efficient • Surge capacity 360,000 tonnes • 2 bins x 400 tonne capacity • Feed rate to bin 14,000 tonnes per hour • Load rate 12,000 tonnes per hour • Capability 9 – 10 trains/day Chichester optimisation (short term) to 55mtpa 50 km rail spur Haul 16 Rail 39 RoM tonnes Christmas Creek Cloudbreak dry Port 55 wet de-sand de-sand plant plant Product tonnes 34 8 19 Construct second plant at Christmas Creek Christmas Creek Cloudbreak mine mine Ramp up Christmas Creek production Christmas Creek on the move October 2009 Christmas Creek operations • Currently producing 6Mtpa from Eyre pit. • Operation established without a lost time injury. • Wholly established as a small operation to supplement Cloudbreak with low Alumina, higher Phos blend. • Cloudbreak no longer requires this feed so the operation now has to compete on $ for $ basis with Cloudbreak. Christmas Creek operations • Approval received to expand operation to build 19Mtpa ore processing facility at Christmas Creek • An initial capacity of 16Mtpa of product and 8Mtpa haul to Cloudbreak. • This equates to 27Mtpa ROM feed, we have assumed 30Mtpa. • Initial 11Mtpa optimisation program will be achieved in January 2010 Christmas Creek operations • Competition between Christmas Creek and Cloudbreak drives lowest cost basis across both operations. • EOI issued for big picture mining contract • Rates based with incremental haulage pricing mechanisms to allow for flexibility of operations. • Our strategy is to have Christmas Creek as a contract operation to benchmark against the owner operator at Cloudbreak. Chichester 55mtpa to 95mtpa Ramp Up Chichester hub – growth pathway to 95mtpa Expansion 55 to 95 mtpa Ramp up 35 to 55 mtpa • Expansion of port and mainline rail infrastructure Start up to 35 mtpa • Construction of second • Cost and efficiency focus plant at Christmas Creek • Fleet • Further ramp up of expansion, introduction Christmas Creek mining • Focus on safety and of SM4200s and M.S.C. organisational foundations • Extension of rail to connect Christmas Creek • Construction of rail and to Cloudbreak port infrastructure • Addition of Christmas • Construction of Creek plant Cloudbreak plant • Ramp up of mining • Start of mining operations at Christmas operations at Cloudbreak Creek and Christmas Creek Solomon Hub 2 Port Hedland Dampier Solomon Hub Solomon – Chichester the only Hub multiple ore type hub Tom Price Paraburdoo Newman Solomon – the next generation • Targeting 4 billion tonnes of resource • Firetail and other Brockman targets should deliver >300mt of DSO product • Brockman is dry and has a strip ratio of less than 2:1 Solomon – the next generation • CID deposits will deliver 600mt of DSO product • CID requires modest moisture management with a strip ratio of <3:1 • Planning for production of 30mtpa of Brockman, expanding to 50mtpa with further exploration • Planning for production of 30mtpa of CID, expanding to 60mtpa Solomon – tier one mining hub Mining Centre Bedded Iron Channel Iron Resource / Production Deposits Deposits Reserve (Mt) Current/ Target (Mtpa) Fortescue Chichester Hub 2,227 38 / 95 Solomon Hub 1,366 2,223 - / 60 /100 Rio Tinto Tom Price 1,030 Paraburdoo / Channar 359 Brockman 2 / 4 985 114 Marandoo 464 Yandicoogina 1,045 West Angela 573 51 Pannawonica 392 Hope Downs 448 11 BHP Billiton Jimblebar 1,622 5 Area C 2,220 36 Yandi 1,844 38 Yarrie 171 1.4 Newman 4,087 26 Solomon – world class iron ore production hub Solomon – Firetail (Brockman) Project • Firetail north (including Joffre) and Firetail south all within close proximity FIRETAIL Additional BID targets