FMG appoints Gaines as CEO
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Fortescue Metals Group has announced major changes to its leadership, with a new chief executive taking the reins and its directors taking a hands-on role to support an updated strategy that focuses on producing more higher-grade iron ore.
Chief financial officer Elizabeth Gaines has been selected as the iron ore miner's next chief executive while former Rio Tinto executive Greg Lilleyman, who was widely tipped to take the top job, has been named chief operating officer.
The changes are due to take effect early next year.
Under the new structure, which will follow the previously announced retirement of incumbent chief executive Nev Power, Fortescue's board of directors will also get more involved in running the business.
Greg Lilleyman has been appointed as chief operating officer
Chairman Andrew Forrest said the changes marked a shift away from a traditional management focus, at a time when Fortescue would explore opportunities in other commodities.
"I will be calling on Fortescue directors to step in, on an occasional and part-time capacity, to further drive this product diversification and asset development," Mr Forrest said.
"I will actively join this effort while encouraging our new CEO to maintain her focus on lowest quartile competitiveness in all existing and future production lines, in all our endeavours and at all times."
Mr Forrest also signalled a shift in Fortescue's strategic focus, to address the big price discount it gets paid in China for its low quality iron ore.
"A change in marketing focus directly related to flexible operations and new markets will also lead to greater penetration in global iron ore markets," he said.
"Complementing this is our target that in the future a majority of Fortescue’s production will be more than 60 per cent iron ore competing head to head in the higher grade markets.
"This strategic target will be achieved through the Firetail replacement project without losing the company’s focus on minimum mine lives of 20 years."
He said the company was rapidly evolving, and technical skills in operating plants to increase grade was improving, while newer ore bodies would also help.
"Getting to the lowest quartile... becoming the most efficient was all seen as being next to impossibler but we did it, look at this in that light," Mr Forrest said.
Mr Lilleyman said the company would be looking at its resource base, with further studies to be undertaken on the Eliwana iron ore development as a potential replacement for Firetail.
One potential move was to look at sales into Europe.
He said the coarse particle size and low phosphorous content of Fortescue's product was in demand there.
Another consideration was that high grade ore had a high level of toxins in it, which caused environmental problems.
"It is this aversion to being the smartest person in the room, her obvious and effective collegiality and ability to communicate at all levels of both the organisation and the community that led to the board’s decision to select Elizabeth over an outstanding international field of CEO applicants," he said.
Ms Gaines path to the top job as Fortescue has been unusual.
She joined the company’s board as a non-executive director in 2013 before being appointed chief financial officer, staying on the board as an executive director.
Previous roles include being chief executive of ASX-listed travel group Helloworld and the Holmes a Court family’s private company Heytesbury.
Elizabeth Gaines will take over as chief executive
Mr Lilleyman, who was most recently director of operations, will be charged with maintaining the world’s lowest cost iron ore operations, while lifting the grade of the bulk of Fortescue’s production to 60 per cent plus Fe and holding true to Fortescue’s minimum 20 year mine life.
In addition, he will be accountable for all sales and marketing as well as the expanded operations.
"Greg will continue the active diversification of the company’s client base and ensure that the culture of innovation, personal ownership, empowerment over authority within all aspects of the company’s culture is fully cemented throughout Fortescue’s vast operational team," Mr Forrest said.
Ms Shuttleworth, who was a 40under40 award winner in 2013, was most recently general manager of Fortescue’s Solomon operations.
"Julie’s leadership capability, cultural understanding of Fortescue and phenomenal intellect will be invaluable in this role," he said.
Mr Wells was group manager, corporate finance.