Malcolm Turnbull to stay at Fortescue despite defunct green board

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The board of mining billionaire Andrew Forrest’s green energy business Fortescue Futures Industries is now defunct, but former prime minister Malcolm Turnbull is not expected to join the list of senior figures exiting the company.

Fortescue has been rocked by a recent string of shock departures, including the head of its iron ore division Fiona Hick and the division’s chief financial officer Christine Morris.

Malcolm Turnbull joined Fortescue Futures Industries in February 2021 as its chairman.Credit: Andrew Meares

Their departures were followed by the exit of former Reserve Bank of Australia deputy governor Guy Debelle from the board of Fortescue Futures Industries.

With Fortescue’s main board the key forum for all corporate decision-making, Fortescue Futures Industries CEO Mark Hutchinson said the renewables business’s board had become redundant.

“All the discussions we have now on the energy side are with the main board, which is the way it should be,” he said.

Hutchison said Turnbull would continue to play a key role at Fortescue as chair of the Green Hydrogen Organisation. The former politician, who served as prime minister from 2015 to 2018, came on board with Fortescue Futures Industries in February 2021 as its chairman.

“He plays a very important role on the Green Hydrogen Association, which we sponsor,” Hutchinson said. Turnbull was approached for comment.

Hutchinson and Hick’s replacement as the head of the iron ore division, Dino Otranto, have just finished the first leg of Fortescue’s investment roadshow in Sydney and Melbourne.

The duo re-assured investors of the $60 billion group’s stability after the departures, as well as changes that will see the mining and the energy businesses compete directly against each other for investment capital. Previously, any green investments were capped at 10 per cent of Fortescue’s earnings.

“The metal side has not experienced the turnover that’s been reported. In fact, we’ve got really, really low turnover from the executive all the way down the organisation,” Otranto said.

Chief executive of Fortescue’s green energy business Mark Hutchinson and chief executive of its iron ore mining business Dino Otranto.

“The company moved fast, right?” Hutchinson said of the quick departures of Hicks and Morris. “It is what it is. It’s healthy for the organisation because we get on [with it].”

Analysts have expressed caution about the changes. UBS analyst Lachlan Shaw said that while the mining business is in strong hands with Otranto, this sudden change, combined with the mining business going head-to-head with energy for investment funds, “may raise leadership concerns for shareholders”.

There is also the issue of the uncertain returns from the significant green energy investments Fortescue is about to make.

Meanwhile, Forrest has ramped up his rhetoric on the looming catastrophe of global warming and said heavy industries like mining and energy are responsible for the deaths that will come from global warming, not consumers.

“I would like the global public to hold people like me to account, we are the problem, industrial leaders, political leaders, you should demand that we step up, that we change how we produce the goods that everyone relies on,” he told a conference in Nairobi this week.

And he made no apology for the abrupt changes at the company.

“They were good people, but we need constant alignment of interest,” he told Bloomberg in Nairobi.

Fortescue is readying for a final investment decision on five energy projects including the Gibson Island project near Gladstone.

The company has also announced that it will pursue fresh investment ventures with US hydrogen company Plug Power with plans to evaluate co-investment in each other’s North American green hydrogen production projects.

Earlier this year, Plug withdrew from a joint venture with Fortescue to develop its hydrogen electrolyser factory on Gibson Island, due to concerns about the economics of the project.

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