Fortescue Metals Group (ASX: FMG) has announced a major restructure that will see its founder Andrew "Twiggy" Forrest return to an executive chairmanship role focused on the core iron ore business, while the group's long-term play in green hydrogen will be given a boost of fresh talent.
Former General Electric (GE) Europe CEO and president Dr Mark Hutchinson will join Fortescue Future Industries (FFI) in early July as director of projects, before becoming CEO by the end of 2022 for the renewable energy development outfit that receives 10 per cent of the group's profit in capital each year.
In FY21 FFI received more than $1 billion from iron ore profits towards its ambitions to produce green electricity, hydrogen, ammonia, and other industrial products such as green steel and fertiliser.
Former AGL Energy (ASX: AGL) Andrew Vesey has also been brought in as FFI’s new head of energy transition projects.
Vesey's former employer AGL has been under fire from vocal investor and tech entrepreneur Mike Cannon-Brookes as "Australia’s single largest greenhouse gas emitter" that the shareholder activist believes has a poor record on renewable generation investment coupled with a "lack of vision".
The leadership changes are part of a more comprehensive group strategy to drive its transition to a global green renewables and resources company, while also providing more clarity on the transition plan for when the current CEO of the iron ore business Elizabeth Gaines steps down from her role in August.
“Bringing in someone with Mark’s global leadership experience and proven track record in managing large scale, complex global organisations and projects goes to the heart of our global vision for FFI,” said Forrest, who formerly was chairman but now with 'executive' added to his title will have both the CEOs of Fortescue and FFI reporting directly into him.
“We are committed to sharply arresting climate change, creating massive economic growth, increasing jobs, and growing our business profitability for our shareholders.
“We will prove that going green has a fabulous and profitable future, providing significant additional value for shareholders by ramping up innovative and game-changing green technologies, green operating know-how and sharing that and our future massive green fuel supply to the world.”
Before being appointed to the top position in GE Europe, where he oversaw a division of over 100,000 employees, incoming FFI exec Dr Hutchinson held several senior positions during his 24-year stint at the company, including five years as head of GE operations in China.
The UK-born future CEO was previously on the board of a London-based sustainability reporting fintech company World Wide Generation, and is the primary sponsor of the Ethics Chair at the University of Queensland, where he holds a Doctor of Business.
“We must urgently reduce emissions now and at scale. No longer should the world be dependent on heavily polluting fossil fuels. The green industrial revolution is well underway globally, and Fortescue is leading it,” said Dr Hutchinson, who sees his appointment as an opportunity of a lifetime.
“As a result of this revolution, we will see an explosion in manufacturing and green energy jobs worldwide with great benefits for local communities.
“Delivering FFI’s global portfolio of green projects to meet our customer demands will be my primary focus whilst leading this incredible global team of talented people driving forward change through hard work and determination.”
To make room for Dr Hutchinson, current FFI CEO Julie Shuttleworth will shift to a senior executive leadership role at FFI.
“It is exciting that we have built such an incredible company from the ground up, to enable someone of Mark’s calibre to join the team to lead FFI in the next stage of its growth,” she said.
“The whole team at FFI are doing amazing work, and I am proud of all we are achieving. Together we are deeply and personally committed to FFI and the changes we are bringing to the industry. I am looking forward to our next exciting chapter.”
Forrest confirmed Shuttleworth remained a deeply revered leader within the Fortescue group.
“Julie is an absolute warrior; an incredible leader, and she has rapidly built a global team and platform for FFI that is now attracting world-leading talent and investors,” he said.
Other leadership changes include current BlackRock China director Li Yifei being appointed to the Fortescue board, and the appointment of Dr Jalal Bagherli as co-chair of subsidiary Williams Advanced Engineering (WAE), alongside current Fortescue deputy chairman MarK Barnaba AM.
Fortescue purchased leading UK technology business WAE earlier this year for a reported $310 million with the intention for it to play a critical role in decarbonising Fortescue’s iron ore operations.
Founded in 2003 by Forrest and his wife Nicola, Fortescue has emerged as one of the leading iron ore companies globally but is now on a mission to turn green by 2030.
With current Fortescue CEO Gaines set to transition to a non-executive director and global brand ambassador for FFI in August as part of the changes, Forrest will directly oversee the iron ore business for an interim period.
“Australia, while being the global laggard in climate change policy and business support, has some of the world’s best concurrent solar and wind, entrepreneurial and project development skills as well as free democratic institutions and government,” Forrest said.
“These were the reasons why FFI recently secured an MoU with Germany’s lead energy company to be its lead green hydrogen supplier.”
FFI signed a multi-billion dollar green hydrogen deal with energy network and infrastructure operator E.ON at the end of March.
Forrest believes the leadership changes are evidence of Fortescue’s transition to a global green renewable and resources company and sent out a warning to industry peers who fail to decarbonise.
“We are doing the hard work to genuinely decarbonise Fortescue, avoiding the temptation we see all around us to greenwash,” he said,
“I wish to specifically congratulate Rio Tinto (ASX: RIO) and BHP (ASX: BHP) for their efforts in their own inevitable decarbonisation journey. For those remaining in the private and public mining and energy sector who ignore the world’s need to change, you do so at your ignorance and peril.”
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