Fortescue Investor Presentation and Site Visit

Fortescue Investor Presentation and Site Visit

10-11 August 2010

DisclaimerImportant NoticeThe 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 beachieved 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 therefrom. Fortescue accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information madeavailable to a person nor any obligation to furnish the person with any further information.

Competent Persons StatementThe information in the report to which this statement is attached that relates to Mineral Resources is based on information compiled by Mr Stuart Robinson, Mr Mark Glassock and Mr Clayton Simpson who are all Members of The Australasian Institute of Mining and Metallurgy.

Mr Stuart Robinson, Mr Mark Glassock and Mr Clayton Simpson are full time employees of Fortescue Metals Group Ltd and provided geological interpretations for Mineral Resource calculations and compiled the exploration results. Mr Robinson, who is a Fellow of The Australasian Institute of Mining and Metallurgy, and Mr Glassock and Mr Simpson who are Members of The Australasian Institute of Mining and Metallurgy, have sufficient experience which is 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, Mr Glassock and Mr Simpson consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

WelcomeRod Campbell

Agenda1. Company Overview

2. Operational Update

3. Marketing, Shipping and Metallurgy

4. Development Strategy

5. Financial Snapshot

6. BC Iron Joint Venture

Company OverviewAndrew Forrest

Fortescue has a dominant Pilbara land position

Fortescue: 71,400km2

Rio: 11,000km2

(Robe 4,200km2)BHP: 6,500km2

Integrated Business – over 72Mt shipped

Ownership of infrastructure is the key

Proven skills in Construction – Completion Records

FACT: Fortescue built its infrastructure faster than any other mining companyFACT: Fortescue ramped up production faster than any other mining company

Port

Rail

Mine

Herb Elliott Port

FortescueRailway

CloudbreakMinesite

From concept To reality

2006

2007

2006

2008

2008

2008

• New exploration model applied • Surface miners optimise grade control• Automated overburden removal systems• Largest ore processing plant in the Pilbara• Fastest heaviest haul rail system• Port out-load rates highest in Australia• Energised and flat structured management team

GROWTH STORY WITHOUT PARALLEL

Innovation at work

4200 Surface Miner

Innovation

Automated overburden

removal system – in operation mid

September

Innovation

The largest Ore Processing Facility (OPF) in the Pilbara

Innovation

Fastest heaviest haul railGuinness Book of Records

Innovation

Australia’s largest shiploaderHerb Elliott Port – Over 72Mt Shipped

Innovation

Fortescue – forging ahead

Operational UpdatePaul Hallam

Key Points

• Significantly improved safety performance.• Improved and Solid FY10 operational performance.• June Qtr 2010 was best sustained operational performance to date.• 40Mtpa rate until Christmas Creek expansion. • FY11 Exciting & Challenging Year;

– Commissioning of overburden handling equipment;– Expansion of Christmas Creek (1 to 5 pits);– Commencement of Christmas Creek ore processing; – Innovation being applied to counter increased strip ratio costs.

Safety

• Management led focus on reducing safety incidents and injuries.

• Significantly improved safety outcomes across all operational areas.

• Hazard Management Program

Lost Time Injury Frequency Rate - LTIFR

Total Recordable Injury Frequency Rate - TRIFR

• Fastest ramp up of any Pilbara mine.

• Surface miners optimise grade control.

• Largest ore processing plant in the Pilbara.

• Fastest Heaviest haul rail system.

• Port out-load rates highest in Australia.

• Energised management team.

• Soon to be replicated at Christmas Creek.

Growth story without Parallel

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annu

al P

rodu

ctio

n (k

t)

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 Fortescue Cloudbreak

Source: Credit Suisse estimates

Ramp up without Parallel

Fortescue Cloudbreak

Fortescue Christmas Creek

FortescueChristmas Creek

Operational update – June Qtr 2010

Mining• Ore production combined rate of >45Mtpa.• Christmas Creek >6Mt in first year of operation.• Commencement of mobile equipment upscaling.

Processing • Processing at Cloudbreak at rate of 42Mtpa.• New oversized crusher to commission in September.

Rail • Heaviest haul and most efficient Pilbara rail infrastructure.

• 40t axle loads, 240 cars and >35,500t/consist.• Best consist utilisation at >10Mt/consist.

Port • Shipments at 44 and 50Mtpa rate for June Qtr 2010 and

June.• Gross load rates in excess of 7,500 tonnes per hour

(Pilbara best).

Mining – Chichester

0

2

4

6

8

10

12

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Ore Mined

0

10

20

30

40

50

60

70

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Total Movement

Processing

Million Tonnes

0

2

4

6

8

10

12

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Ore Processed

Million Tonnes

0

2

4

6

8

10

12

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Ore Railed

Rail

Port

Million Tonnes

0

2

4

6

8

10

12

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10

Ore Shipped

FMG Ore 3rd Party Ore

• Production and shipments to be maintained at rate of around 40Mtpa until the Christmas Creek OPF is commissioned.

• Wet commissioning of Christmas Creek OPF to commence February 2011.

• Expansion to 55Mtpa run rate for June Qtr 2011.

Production forecast

• Reduce rehandle

• Overburden handling equipment

• Next generation surface miners

• Larger scale trucks & shovels

• Permanent primary crusher

• Ore conveyor system

• OPF enhancements (FY12)

– CB: Wet Front End;

– CC: Additional Scrubbers

Efficiency Improvements

Marketing & ShippingRussell Scrimshaw

• Current forecast of around 620-630Mt of steel production for 2010. • Year on Year rise of over 10 per cent (2009 568Mt)

• China cooling construction and inflation (above average two per cent). • Real economy still growing at over 10 per cent pa.

• Construction bubble (construction 55-60 per cent of GDP) prompted tightened credit rules

• Chinese consumer demand strengthening after recent large ‘minimum salary’ rises

• Government allocating large amounts of land to support continued large scale rural migration to cities.• Infrastructure stimulus program of $101bn pushing ahead in Central and Western areas

• Steel exports recovering very well.

• Steel prices generally falling to flat since April. Futures curve looking strong. Rebars from 4500rmb/t to 3700rmb/t in late July, recovered slightly to around 4100rmb/t

Chinese steel industry and economy

Shanghai spot rebar v 62% ore spot index (10 Aug)

Source: GFI

• Big 3 migrated market in June Qtr 2010 to lagging ‘Index average’ for majority of shipments

• BHPB offering customers choice of the previous 30, 60, or 90 day average of the Platts Index for each subsequent quarter. Vale and Rio offering 90 days. Shipping currently around $9/wmt.

• Key factors influencing recent Index price and volume movements

- low shipping rates- declining China domestic ore Fe grade- India including monsoon season, export taxes and state export bans- recovery of other Asian and European steel makers- generally weak international steel prices- destocking by Chinese mills in response to high 3Q10 quarterly Index prices

Market Pricing for Iron Ore

China Spot Ore & Shipping Prices (10 Aug)

Source: GFI

• Japan and Korea are back to pre-GFC production levels

• Many large European and Asian steel makers are keen for a supply relationship as a result of Fortescue market credibility, proposed BHBP/Rio iron ore merger and expiring current LTAs

• Fortescue expects several new non-China ‘blue chip’ customers in the half year.

Non China Iron Ore demand

China's iron ore imports to June 2010

Source: GAC

Country Imports, Jun ('000 tons)

M-o-m change (%)

Imports, Jan - Jun ('000

tons) Y-o-y change

(%)

Australia 21,033.78 -6.12 128,020.52 5.17 Brazil 8,419.56 1.01 59,625.25 -1.9 India 8,293.91 -21 64,883.43 3.83 South Africa 2,211.15 -31.5 14,740.55 -9.17 Iran 1,305.71 19.82 6,749.61 184.53 Peru 754.43 12.69 3,659.9 30.99 Ukraine 731.64 -41.06 5,751.05 -23.31 Indonesia 616.92 0.4 4,302.92 63.08 Kazakhstan 585.09 2.69 3,101.13 6.54 Chile 513.07 11.53 2,885.4 43.84 Russia 382.97 -23.14 2,106.93 -38.02 Canada 317.57 64.71 1,324.59 -58.43 Mexico 302.76 46.78 1,250.24 47.11 Venezuela 261.15 -15.19 1,694.78 19.03 Malaysia 206.76 -2.98 1,086.12 204.79 Mongolia 199.39 -3.61 1,092.06 114.8 DPRK 198.93 35.4 749.02 52.79 Vietnam 153.93 -18.9 917.06 81.49 Total 47,173.39 -9.1 309,282.94 4.06

• Market demand for Fortescue ore remains very healthy. Shipped to over 45 steel mill customers; including 3 from outside China (expect this will more than double in this half year)

• Policy of CFR shipments to optimise port throughput

• Pricing using Platts dmtu price for 62 per cent ores averaged over a period

• June quarter averaged approx US$130 CFR and over 11m wmt shipped

• Expect September quarter volume to be >9.5m wmt

• Joined IOSDA to monitor development of derivatives market

Fortescue current market status

China Forecast: Iron Ore Supply by Country

Source: AME

0

200

400

600

800

1000

1200

1400

2004

2006

2008

2010

2012

2014

2016

2018

2020

Volu

me (

Mt)

Contained Fe: Dom.Contained Fe: Imp.

*Grade of Chinese Domestic Production is

Domestic vs. Imported Ores (Mt)

Source: Citi Investment Research & Analysis

2010 2011 2012 2013 2014 2015 2015 Target

Cumulative New Capacity

82 131 205 303 456 615 870

Seaborne Iron Ore growth

Fortescue creating Quality ‘Index’ to underpin our price

• The quality of Iron Ore is not just determined by Natural Fe content;

• Platts, TSI and MBI Indexes base price on Fe within tight Fe ranges and standard Si02, Al2O3, P, S and LOI content. Take no account of metallurgy or ore behaviour;

• A Quality adjustment can be calculated based on market ‘Platts Index price’ plus technical correlations to sinter plant and BF productivity = “Iron Quality Index (IQI)”;

• Developing a tool including all quality parameters towards Value in Use (VIU) of iron ore in a given mill using IQI and modelling of VIU; and

• IQI is also an internal KPI for tracking and maximising ore value for a given Fortescue mine plan and schedule.

We are developing an “Iron Quality Index” to replace “Fe Content” to better correlate the market price of different ore types. This index would also be used as true determination of quality within Fortescue

Link to customer Value in Use (VIU)• Market price for a given quality is a function of the VIU of the product and Market

positioning/ strategy• The Iron Quality Index is a simplified correlation to the complex calculation of

value in use. It is less accurate but valid for small changes in composition.

VIU Model design

ShippingMark Davidson

• 20 nautical mile, draft restricted entry channel into Port Hedland

• 2 berth, 1 shiploader; continuous loading while full vessel waits to sail

• 19.7m available draft at Fortescue AP2 berth

• Sailing draft 14.1m + Tide – Under Keel Clearance. Average sailing draft since commencement 17.71m

• Very fast shiploader capable of loading in excess of 100kt in12 hour shift

• Specialised shallow draft, wide beam vessels will optimise output

Load Port Characteristics

• High volatility due to short term vessel supply/demand imbalance

• Recent $/t Port Hedland to China (C5) fluctuated between US$6-US$24.36 pwmt. This volatility must be managed

• Fast growing demand for vessels driven by greatly increased demand for iron ore, coking and thermal coal

• Large increase in new build vessels. Expected increase of 27 per cent in capesize fleet and further 24.6 per cent in 2011

Freight Market

0.00

5.00

10.00

15.00

20.00

25.00

3/08

/200

920

/08/

2009

9/09

/200

928

/09/

2009

15/1

0/20

093/

11/2

009

20/1

1/20

099/

12/2

009

5/01

/201

022

/01/

2010

10/0

2/20

101/

03/2

010

18/0

3/20

108/

04/2

010

27/0

4/20

1017

/05/

2010

4/06

/201

023

/06/

2010

12/0

7/20

1029

/07/

2010

$/Mt Rate Shipping Cost Western Australia to China

• Implemented to drive efficiency of port and rail AND move to Index pricing

• 55Mtpa requires 27 capesize shipments per month

• Fortescue control of vessel schedules necessary to target 1-2 day loading slots

• Specific vessel configurations targeted to maximise lift per vessel

• Provides flexibility to swap vessels to meet cargo or grade requirements

• Significantly minimises FOB ports demurrage eg Dalrymple Bay, Newcastle. As example, in June 2010 shipped 4.228Mt on 24 capesize vessels with minimal delays and minimal demurrage incurred (US$140k)

CFR Sales Policy

• Pre financial crisis, Fortescue concluded long term COA and Time Charter contracts to take advantage of lower forward rates compared to all time high spot rates

• GFC changed everything and certain contracts were suspended and subsequently renegotiated for approximately 12 vessels per month. Existing contracts today cover around 60-65 per cent of requirements at ~42Mtpa production

• Product CFR pricing has a portion linked to the Baltic Exchange C5 Index

Shipping Contracts

• Strategy to implement flexible arrangements that maximise ore throughput while building profitable shipping book. Key principles:• Suite of flexible contracts with rolling expiration;

• Specific vessels targeted to take advantage of load port infrastructure; and• Develop relationships with first class owners, operators and ship yards.

• Defined levels of long, medium and short terms contractual cover combined with spot market vessels

• Trading period chartered vessels to take advantage of short term market volatility

• “Fortescue Max” initiative underway to identify most efficient vessel as we expand from two berth/one loader to three berth/two loader scenario and beyond.

Shipping Strategy

Technical MarketingJohn Clout

Target versus Actual Grades – Rocket Fines

Product Target Grade

and Limits

Chemical Analysis dry weight %Totals

(Wt %)

Free Moisture (Wt %)Fe SiO2 Al2O3 TiO2 Mn CaO P S MgO K2O Na2O

LOI Total

Rocket Fines 59.0 4.4 1.9 0.080 0.50 0.08 0.054 0.030 0.09 0.030 0.030 8.5 100.29 10.5

FY10 - YTD Totals/

Fe SiO2 Al2O3 TiO2 Mn CaO P S MgO K2O Na2OLOITotal

Total(Wt %) Fecalc

Free moisture

Weighted Average 59.17 4.26 1.93 0.070 0.480 0.08 0.051 0.028 0.07 0.022 0.028 8.14 100.06 64.41 9.2%Standard Deviation 0.29 0.32 0.08 0.005 0.130 0.02 0.003 0.003 0.01 0.004 0.006 0.24 0.08 0.30 0.6%

Product Size FY09/10

+6.3mmcontent

(Dry basis)

-0.150mm content

(Drybasis)

Weighted Average 13.9% 6.8%Standard Deviation 2.4% 0.8%

Weighted Mean Shipped Grade for Rocket Fines – 1/07/2009 to 30/06/2010

Brand FeSiO2 Al2O3 P Mn LOI Total Fe SiO2* Al2O3 P Mn

SiO2+ Al2O3

RM 57.0 5.7 2.7 0.040 0.08 9.2 62.8 6.3 3.0 0.044 0.09 9.2

BY 58.5 5.1 1.3 0.037 0.03 9.4 64.6 5.6 1.5 0.041 0.03 7.1

RY 58.7 4.2 1.4 0.044 0.04 9.9 65.1 4.7 1.5 0.049 0.05 6.2

Fortescue - Rocket Fines 59.0 4.4 1.9 0.054 0.50 8.5 64.5 4.8 2.0 0.059 0.55 6.9

BM 61.8 4.0 2.1 0.066 0.26 4.5 64.7 4.2 2.2 0.069 0.27 6.4

RPB 62.2 3.6 2.1 0.082 0.12 4.7 65.3 3.8 2.2 0.086 0.13 5.9

BN- Premium 62.8 4.4 2.2 0.079 0.08 3.2 64.9 4.6 2.3 0.082 0.08 6.8

Uncalcined (Wt %) Calcined* (Wt %)

MYTH – ‘Fortescue ores are low grade’

REALITY - >40 per cent of 2008/09 Pilbara iron ore fines production was lower in Fe than Fortescue Rocket Fines. Rocket sits in the middle in terms of Fe, silica and alumina

How does Rocket Fines grade compare with BHPB, Rio?

* Calcined is when the crystal water or Loss On Ignition (LOI) Is removed as steam above 300oC

Rocket Fines Fe with Pilbara competitor fines

Appears to be a big difference in natural Fe content compared to HG Brazilian fines and HG Indian fines.

Rio

-M

esa

J

LG In

dian

Fin

es

BH

PB -

Yand

i

Rio

-Yan

dico

ogin

a

FMG

-R

ocke

t

BH

PB -

MA

C

Rio

-Pilb

ara

Ble

nd

BH

PB -

Prem

ium

HG

Indi

an F

ines

Vale

-PF

Vale

-Ita

bira

52.0

53.0

54.0

55.0

56.0

57.0

58.0

59.0

60.0

61.0

62.0

63.0

64.0

65.0

66.0

67.0

68.0

% F

e

Uncalcined Fine Iron OresIron

7.0% Fe dif ference

LG In

dian

Fin

es

Rio

-M

esa

J

BH

PB -

Yand

i

FMG

-R

ocke

t Fin

es

BH

PB -

MA

C

BH

PB -

Prem

ium

Rio

-Yan

dico

ogin

a

Rio

-Pilb

ara

Ble

nd

HG

Indi

an F

ines

Vale

-Ita

bira

Vale

-PF

57.0

58.0

59.0

60.0

61.0

62.0

63.0

64.0

65.0

66.0

67.0

68.0

69.0

70.0

% F

e

Calcined Fine Iron OresIron

<2.6% Fe dif ference

Once crystal water is removed as steam during sintering, small Fe difference between Fortescue Rocket Fines and Brazilian HG fines

Al2O3, SiO2 and P in Rocket Fines is lowVa

le -P

F

HG

Indi

an F

ines

Rio

-Pilb

ara

Ble

nd

BH

PB -

MA

C

BH

PB -

Prem

ium

Rio

-Yan

dico

ogin

a

FMG

-R

ocke

t Fin

es

LG In

dian

Fin

es

BH

PB -

Yand

i

Rio

-M

esa

J

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

% S

iO2

Calcined Fine Iron Ores Silica

<1.2% SiO2 dif ference

Vale

-Ita

bira

Vale

-PF

BHPB

-Ya

ndi

Rio-

Yand

icoog

ina

FMG

-R

ocke

t

Rio-

Pilb

ara

Blen

d

BHPB

-M

AC

BHPB

-Pr

emiu

m

HG

Indi

an F

ines

Rio

-Mes

a J

LG In

dian

Fin

es

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

% A

l2O

3

Calcined Fine Iron Ores Alumina

<0.6% Al2O3 dif ferenceVa

le -I

tabi

ra

Vale

-PF

BH

PB -

Yand

i

Rio

-M

esa

J

Rio

-Yan

dico

ogin

a

FMG

-R

ocke

t Fin

es

BH

PB -

MA

C

HG

Indi

an F

ines

LG In

dian

Fin

es

BH

PB -

Prem

ium

Rio

-Pilb

ara

Ble

nd0.000

0.010

0.020

0.030

0.040

0.050

0.060

0.070

0.080

0.090

0.100

% P

Calcined Fine Iron Ores Phosphorus

<0.02% P dif ference

Rocket Fines has favourably coarse size

Rocket has a coarse size – which improves productivity for sintering

Vale

-PF

CJ

Rio

-Pi

lbar

a B

lend

Vale

-C

JF

MA

C -

BH

PBIO

Vale

-SF

SC

HG

Indi

an

Vale

-C

araj

as

BH

PBIO

-Pr

emiu

m

Rio

-Ya

ndic

oogi

na

FMG

Roc

ket F

ines

BH

PBIO

-Ya

ndi

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

1

% R

etai

ned

Fine Ore Product

Fine Ore Size - % >1.0 mm

Proven Value in Use for CustomersSummary:1. Very good sintering properties – fast sintering speed

2. Can be used in large per cent of customer blends - used at 20-45 per cent level in many Chinese customer sinter blends (vs 12 per cent for other MM fines)

3. 64.5 per cent Fe calcined – competitive with Brazil and other Australian fines4. Low in contaminants - (4.4%) SiO2, 1.9% Al2O3 and 0.054% P5. Coarse size and low ultrafines content so ideal for China

0%

5%

10%

15%

20%

25%

30%

0-10 10-20 20-30 30-40 40-50 50 - 80 >80

% o

f For

tesc

ue C

usto

mer

s

% Rocket Fines in Sinter Blend (Ore Basis)

Rocket Fines Usage at Customer Steel Mills

Proposed Product Mix for Solomon

Designing for:

• ~40Mtpa CID fines only product with Fe ~58%, similar to Yandi but ~1.9-2.0% Al2O3. Competitive with existing Rio/BHPB CID products

• ~20Mtpa Brockman fines only product from mixing higher P Firetail BID with low P Detrital (DID) fines. Maximises use of DID resources and product physical quality. Blending completed at Solomon stockyard.

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.

Target production estimates provided for Three Mining Hubs are hypothetical in nature and may not be achieved.

Port capacity at Port Hedland has been allocated to 120Mtpa. Fortescue’s target of increasing this to 155Mtpa may not be achieved, however, the Company has made its intention known to the Port Authority to provide this increase and will continue to work towards this outcome.

Development

Execution Strategy Implementation Plan

Peter Meurs

• Production to 55Mtpa Board Approved• Production beyond 55Mtpa still subject to

Board Approval

Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

SolomonHub

Karratha

New Pilbara Port (Anketell)

Fortescue Infrastructure

Fortescue Rail

Proposed Fortescue Rail

API Joint Venture

Rio Tinto Rail

BHP Rail

WesternHub

Three Hub Mining StrategyChichester, Solomon and Western

Solomon Resources have now been expanded to 2.86 billion tonnes, with 786 million tonnes in Indicated and

Inferred category.

Chichester Hub

Port Hedland

Dampier

40

Paraburdoo

Tom Price

Newman

32

8


Fortescue Rail

Rio Tinto Rail

BHP Rail

Execution Strategy – Production – June 2010Chichester, Solomon and Western

Karratha

Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

36

16

At Capacity

Hopper 5Jaw Crusher

OPF 1Expanded Mine

3 BCIJV


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha

55


Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

39

24

Berth 3Shiploader 2Train Unloader 2Stockyard 2

OPF 1 ExpandedExpanded Mine

5

BCIJV Expanded


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha

Wet Plant

80

12

Solomon Hub

Firetail Brockman Early Production


Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

35

40

Berth 4 (SW Creek)Shiploader 3Train Unloader 3Stockyard 3

OPF 2 addedExpanded Mine

5


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha

120

40

OPF 1 Firetail Brockman 20OPF 2 Kings CID 20

Solomon Hub


BCIJV Expanded

Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

35

55

Berth 5 (SW Creek)

Expanded Mine

5 BCIJV


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha


20

Solomon 2

155

Early Production

Solomon Hub

20 60

Brockman 20CID 40


Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

35

55

5 BCIJV


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha


80

155

20

WesternHub

Solomon Hub

60 60


Early Production

Expansion

Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

35

55

5 BCI


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha


150

155

WesternHub

50

Solomon Hub

100 60


Chichester Hub

Port Hedland

Dampier

Paraburdoo

Tom Price

Newman

35

55

5 BCI


Fortescue Rail

Rio Tinto Rail

BHP RailKarratha


200

155

100

Solomon Hub

100 60

WesternHub


Solomon Phase 160mtpa

Brownfield Expansion

Bryan PearceChichester

Development55mtpa – 95mtpa

(+3mtpa BCI)

Brownfield Expansion

Peter Thomas

Port / Rail55mtpa – 155mtpa

Eamon Hannon

Progress 40Mtpa – 55Mtpa

Bryan Pearce

• Signaling design is 85 per cent complete

• Communication design is 75 per cent complete

• Track Construction:• 44/44 km formation completed and handed over• 23/44 km of sleepers have been laid• 4/44km of rail has been completed

T55 Progress - Rail

T55 Progress - OPF• The Christmas Creek Ore Processing Facility (OPF) is on

schedule with work being undertaken in all areas of the plant. Construction work is 30 per cent complete.

T55 Progress - OPFMajor works being undertaken are as follows:• All long lead equipment has been purchased with no

delivery issue to date;• Primary Crusher concrete works are well progressed with

the tunnel complete and concrete poured up to the crusher support level. Structural steelwork erection of conveyors is underway;

• Screening building concrete works completed and structural steelwork erection is underway;

• Major concrete works for secondary/tertiary crushing completed. Structural steelwork erection is underway. MP1000 secondary and tertiary crusher bases are in place.

• Desands plant concrete works underway and footings for thickeners completed.

T55 Progress Hopper 5

T55 Progress – Hopper 5

• Fabrication of the ROM bin has been completed and installation commenced

• Mechanical fit out of the tunnel has commenced (apron feeder on site)

• Mechanical fit out of conveyor CV004 is well advanced

• The additional switchroom has been installed and is being hooked-up

Chichester Expansion 55Mtpa – 95Mtpa

Bryan Pearce

• Christmas Creek current work areas:• Mine planning (5 year plan plus “life of mine”)• Hydrology• Materials handling• Process plant• Approvals road map• Risk identificationThis information will be integrated into the final Feasibility Study.

• Christmas Creek Expansion - Feasibility work covers:

• Increase from current project capacity, 16Mtpa to 25Mtpa by addition additional crushing and screening

• Additional processing plant capable of 30Mtpa

T95 Progress

Christmas Creek 60Mtpa LOM

Cloudbreak current work areas:

• Work activities for the Cloudbreak wet scrubbing are well progressed with final control estimates and schedules are currently being validated.

T95 Progress

Cloudbreak 35Mtpa LOM

Solomon Project 60Mtpa

Eamon Hannon

Solomon MomentumDFS completion December Qtr 2010, engineering and design commenced.

• Exploration success 2.8 billion tonnes and growing. 1 billion tonnes in Solomon Stage 1;

• Land Access and Environmental consents / approval well advanced; and

• Mining leases applied for, engineering and metallurgy studies progressing.

• Early engagement of contractors and suppliers commenced.

20 Mtpa BID

40 Mtpa CID

5km

Project Targets – 60Mtpa• Early ore production (Firetail North and South) – June 2012• Project completion of Stage 1 (Firetail and Kings Production) – June 2013

• Capital budget for release with DFS in December Qtr 2010.

• Ore body development continuing. Mine planning and metallurgy progressing

• Design and engineering progressing. Rail well advanced, OPF flowsheets established.

• Contracting and procurement planning underway. Early engagement of contractors and suppliers commenced.

• Plan includes Chinese procurement. Early orders from China to include construction camp accommodation modules.

Study & Development Progress

• Firetail deposit less than 1:1 strip ratio and above water table

• Kings CID less than 2.5:1 in part below water table, but fresh water

• Traditional low cost mining methodology

• Established and well accepted product type

• 50 per cent exploration upside

Solomon competitive advantages

Port 55Mtpa – 155Mtpa

Peter Thomas

• Expansion to 95Mtpa (3 berths) then 155Mtpa (5 berths)

• 2nd outload circuit project commenced

• 3rd berth

• 2nd shiploader

• 2nd reclaimer

• WorleyParsons team re-engaged as EPCM team

• ThyssenKrupp re-activated

• Detailed engineering re-activated and midway

• Forecast completion in December Qtr 2011

Port Expansion

• 2nd and 3rd inload circuits work also underway

• 2nd and 3rd train unloaders

• South West Creek dredging environmental approvals progressing well

• Expected approval in June Qtr 2011

• Dredging is critical path and certain early works dredging can commence in Nov 2010 to sustain schedule

Port Expansion

Current Port infrastructure

2 Stackers1 Reclaimer

1 Train Unloader

2 Berths1 Shiploader

95 Port infrastructure

2 Stackers2 Reclaimers

2 Train Unloaders

3 Berths2 Shiploaders

155 Port infrastructure

3 Train Unloaders

4 Stackers3 Reclaimers

5 Berths3 Shiploaders

Port infrastructureCapacity (mtpa) 55 95 155Berths 2 3 5Shiploaders 1 2 3

Capacity (mtpa) 55 95 155Stackers 2 2 4Reclaimers 1 2 3

Capacity (mtpa) 55 95 155Train Unloaders 1 2 3

Rail ExpansionPeter Thomas

• Expansion to 95Mtpa then 155Mtpa• Effective duplication of rail to 129km mark

with multiple additional crossing loops beyond 129km

• New train control system• Additional rolling stock

• Switch to AC locos• Expanded maintenance yard• Train cycle times expected to improve with

enhanced train control system

Rail Expansion

New Train Control SystemWayside Signal System

Existing Communication Tower

Interlocking Control

Axle Counters + Wayside Signals

Communication-Based Signalling

Full Capability of:

2 Point MachinesHundreds of meters of cabling and power

6 Routes 4 Signals4 Shunting Signals

The old way

Communication based TCS minimizes wayside equipment

The new way

Anketell Port

Anketell Port 350+ Mtpa Staged Multi-user port

• 3 Foundation Companies together with Government – Fortescue, API & MCCSJ

• Major Project Status

• Approvals & Land access commenced

• Operational target of 2014

• First stage estimate A$4B

Two ports for three hubs

Financial SnapshotStephen Pearce

• Strong cashflow from Operations.

• Cash on hand at 30 June 2010 US$1.235Bn.

• Leucadia accrued payments made in full July 2010.

• Increased production/margins/cashflows in June Qtr 2010.

2010 Financial Highlights

Cash costs per tonne US$/t Q1FY10 Q2FY10 Q3FY10 Q4FY10 FY10

AverageMining and processing 21.24 22.04 24.37 27.20 23.81

Rail and port 5.36 5.39 5.06 5.05 5.21

Total Direct Costs 26.20 27.43 29.43 32.25 29.02

FY2010 Production costs

Increase in cost pressures:• Higher mine strip ratios;• Use of small crushers prior to commissioning

of primary crusher (September Qtr 2010);• Higher transfer costs associated with

Christmas Creek ore.

Improvements to efficiency• Reduction in rehandle and overburden handling;• Next Generation Surface Miners accompanied by

larger scale trucks and shovels;• Permanent primary crusher and ore conveyor

system:• OPF Enhancements.

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0.00

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BC IronMike Young

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