BMO ConferenceFebruary 2012

For

per

sona

l use

onl

y

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 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 therefrom. 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.

Additional InformationThis presentation should be read in conjunction with the Annual Financial Report as at 30 June 2011, the half year financial statements together with any announcements made by Fortescue in accordance with its continuous disclosure obligations arising under the Corporations Act 2001.

All amounts within this presentation are stated in United States Dollars consistent with the Functional Currency of the Fortescue Metals Group Limited.

Tables contained within this presentation may contain immaterial rounding differences.

2

For

per

sona

l use

onl

y

33

Fully integrated – large scale efficiencyOwnership of infrastructure is the key

For

per

sona

l use

onl

y

44

Chichester Hub

Dampier

Tom Price

Karratha

Fortescue Infrastructure

Fortescue Rail

Rio Tinto Rail

BHP Rail

BCI JV

SolomonHub

Clear strategy 155mtpa June 2013

Herb Elliott PortPort Hedland

For

per

sona

l use

onl

y

55

0

20

40

60

80

100

120

140

160

Mill

ion

Tonn

es

Solomon BrockmanSolomon CIDBCI JVChristmas CreekCloudbreakConsensus

A near term growth story Value creation through early delivery

Jun-12 Dec-12 Jun-13 Dec-13 Jun-14

For

per

sona

l use

onl

y

66

Fortescue DVDForging ahead

For

per

sona

l use

onl

y

7

• A new exploration model

• Fastest ramp up in the history of the Pilbara

• Surface mining technology for grade control

• Heaviest haul rail system in the world

• Highest port out-load rates in Australia

• Largest ore processing plant in the Pilbara

Core competenciesInnovation and rapid execution

For

per

sona

l use

onl

y

88

2,266 2,227 2,143 2,550 2,550

695 695 695695 695

1,715 2,224 2,8603,070 3,070

624 624

1,0322,013

1,2301,230

2,465

3,236

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008 2009 2010 2011 2012

Min

eral

Res

ourc

es (M

t)

Fiscal Year Chichester Hub Chichester Other Solomon Hub Western Hub Nyidinghu Magnetite

Resource portfolio sets expansion platform

1.5btAnnualised growth of

per annum

For

per

sona

l use

onl

y

99

Chichester Hub

Nyidinghu

NyidinghuA dot on the map in 2010

Fortescue tenement holding

Herb Elliott Port

SolomonHub

• Over 2 billion tonnes discovered since 2010

• Low 2:1 low strip ratio = low cost

• Ideal for Chichester blending

• Leverage existing infrastructure

For

per

sona

l use

onl

y

10

CultureFortescue’s unique culture is the key

RelationshipsDirect relationships with sub contractors and local suppliers

ChinaLeveraging China’s fabrication and delivery capability

SpeedSpeed of delivery – time is money

Planning Planning for scale today and efficiency into the future

New development modelDelivering results

For

per

sona

l use

onl

y

1111

Operating Highlights

• Integrated mine, rail and port running at over 55mtpa for December Qtr

• Commissioning of third berth with new out-load circuit

• Sixth train set joins the rail fleet

• New generation surface miners at Chichester HubFor

per

sona

l use

onl

y

12

Financial HighlightsRecord performance

• $3.4 billion first half FY2012 record revenue

• $1.5 billion underlying EBITDA

• $801 million net profit of up 155% on the prior period last year

• 27 million tonnes shipped up 30% on the prior period

• 14.4 million tonnes shipped in Dec Qtr a run rate of 58mtpa

• C1 costs reduced to $46/wmt in Dec Qtr

• $2.5 billion cash at bank at end of DecFor

per

sona

l use

onl

y

1313

Consistent sustainable growth

Mining Rail Port

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12

Ore Processed (wmt)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12

Ore Railed (wmt)

Third Party OreRailed

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12

Ore Shipped (wmt)

Third Party OreShipped

For

per

sona

l use

onl

y

14

High margin producerChanged pricing delivers strong returns

$50 $53 $61

$67 $80 $78

$70 $68

$107

$135

$159

$138

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

2H2009 1H2010 2H2010 1H2011 2H2011 1H2012

Benchmark regime - FOB Index pricing - CFR

US$

per

dry

tonn

e

• Index pricing better represents supply/demand• CFR terms lock in shipping advantages for proximity to market

Average COGS per dry tonne

Average CFR selling price per dry tonne

Gross margin

$20Gross margin

$15

Gross margin

$46

Gross margin

$68

Gross margin

$79Gross margin

$60

For

per

sona

l use

onl

y

15

The market

For

per

sona

l use

onl

y

16

China – the twelfth five year planGreat news for Pilbara iron ore

Source: McKinsey Global Institute

will live in China’s cities by 2030

billionpeople

Chinese cities will have 1m+ people living in them –Europe has 35 today

221skyscrapers by 2030 - equal to ten NY cities

50,000

GDP growthby 20255x

For

per

sona

l use

onl

y

17

330 340 280 275 245

719

764

879

9531027

600

650

700

750

800

850

900

0

200

400

600

800

1000

1200

1400

2012 2013 2014 2015 2016

Seaborne IO demand Domestic IO demand Steel production

0

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010 2011

Crude steel production

Imported iron ore Mt

China’s steel production up 60% over 5 yrs – Iron Ore imports up 110%

China’s steel production forecast to increase 25% over next 5 years -China’s imports of iron ore up 50%

Source: Moils & Company estimates, Tex Report, Bloomberg

China increasingly looks to imported iron ore

Iron

ore

prod

uctio

n (M

t)

Ste

el p

rodu

ctio

n (M

t)

For

per

sona

l use

onl

y

And the seaborne market is struggling

2012 likely to be the smallest increase to seaborne supply in last 5 years

India’s withdrawal from the iron ore market has been rapid and unexpected

0

20

40

60

80

100

120

140

160

180

2006

2007

2008

2009

2010

2011

2012

f

2013

f

2014

f

2015

f

2016

f

Mill

ion

Tonn

es

New seaborne production

0

20

40

60

80

100

120

140

2009

2010

2011

2012

f

2013

f

2014

f

2015

f

2016

f

Mill

ion

Tonn

esYear

Indian Exports

Source: Macquarie Bank Commodity Review 2012

18

For

per

sona

l use

onl

y

19

China’s domestic production fills the gap, but at a cost

China’s iron ore tonnes mined doubles in 5 years but contained iron units of production remain steady

Grade degradation in Chinese domestic production rises at an alarming rate

33% 32%

27%25% 23%

18%

0%

5%

10%

15%

20%

25%

30%

35%

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

China - average domestic iron ore grade (% Fe)

Source: Moils & Company estimates, Tex Report, Bloomberg

0

200

400

600

800

1000

1200

1400

2006 2007 2008 2009 2010 2011

Mill

ion

Tonn

es

Chinese total production

Chinese contained iron (62Fe)

For

per

sona

l use

onl

y

20

Development

For

per

sona

l use

onl

y

21

Fortescue to capture the opportunityRapid growth – Capital Efficiency

• Short term155mtpa two mining hubs, rail and port expansion advancing rapidly

• Medium termOptions with Nyidinghu, Western Hub and Anketell Port

Budget US$ billions Committed to date

Port 2.4 1.7

Rail 2.2 1.5

Chichester Hub 1.1 0.7

Solomon 2.7 2.3

Sub Total 8.4 6.2Mine Fleet 1.6 1.2

Total 10.0 7.4

Infrastructure capital intensity

per tonne

$84as at 14 February 2012

For

per

sona

l use

onl

y

22

Port access – the key to success in the Pilbara

Fortescue

For

per

sona

l use

onl

y

Port expansion milestones

Port• Commissioning of third berth in progress

• Second in-load circuit end September Qtr

• Third in-load and out-load circuits end December Qtr 2012

• Fourth berth end March Qtr 2013

23

For

per

sona

l use

onl

y

Rail expansion milestones

Rail• Main line duplication end September Qtr 2012

• Spur line to Solomon end December Qtr 2012

• Additional ore cars and locos over the next 10 months.

24

For

per

sona

l use

onl

y

Chichester Hub expansion milestones

Christmas Creek• Second OPF end September Qtr 2012

• Current OPF to 25mtpa run rate by end June 2012

• Mining ramp up to 50mtpa by end December Qtr 2012

Cloudbreak• Wet front end completed by end September Qtr 2012

25

For

per

sona

l use

onl

y

Solomon Hub expansion milestones

Solomon• Mining contract to be finalised early June Qtr 2012

• Sealed airstrip operational in June Qtr 2012

• Firetail OPF commencing ramp up December Qtr 2012

• Kings OPF commencing ramp up March Qtr 2013

26

For

per

sona

l use

onl

y

2727

4,058

5,421

9,256

3,956

4,634

6,031

0

2,000

4,000

6,000

8,000

10,000

FY12 FY13 FY14

Potential FMG results - EBITDA

Broker consensus - EBITDA

$3bn of EBITDA growth on the tableIt’s all about execution

EBIT

DA

(US$

m)

The above chart uses broker consensus operating costs and consensus iron ore prices with the differential being the tonnes per annum ramp up profile.

For

per

sona

l use

onl

y

28

2012 and beyond – delivering on promisesPure iron ore company leveraged to Asia

• Culture is our differentiator

• 55mtpa production base sets the platform

• Growth to 155mtpa June 2013

• Further development options through aggressive exploration

• Nyidinghu + Western Hub = options

• Multiple mine and port strategy to deliver within window of opportunity

• A value proposition without parallel

For

per

sona

l use

onl

y

29

The equity value proposition awaitsA PE uplift and re-rating expected on milestone achievements

Year 2012 2013 2014

Average Fortescue PE 11.6 7.9 5.6

ASX 200 Sample 12.6 11.1 10.1

ASX 200 Materials 12.7 10.0 9.0

For

per

sona

l use

onl

y

Sign up to alerts online

www.fmgl.com.au

Forging Ahead

For

per

sona

l use

onl

y