13/11/2008 - 09:34

FMG steadies ship with new appointment

13/11/2008 - 09:34


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Fortescue Metals Group has appointed Paul Hallam as it's new head of operations.

Fortescue Metals Group has appointed Paul Hallam as it's new head of operations.

Mr Hallam has over 30 years of experience in the global resource industry across the gold, base metals, iron ore and aluminium sectors having previously worked with Alcoa, North, and Newcrest.

FMG, Australia's third largest iron ore producer, was dealt a blow on Tuesday with the resignation of its chief operating officer, Alan Watling.

An internal message released to FMG staff yesterday said Mr Watling, who was architect to much of the company's development, will hand over to Mr Hallam and step down in the coming months.

The note highlighted that Mr Watling's flair, personality and contribution will be sorely missed by by the organisation however his ongoing role until Mr Hallam is bedded in will remain invaluable.

FMG thanked Mr Watling for his enormous contribution and dedication to the company, which commenced at the initial planning stages.

He was integral to the construction and now smooth operations of the mine, port and rail systems.

Mr Watling is working with Mr Hallam to integrate his leadership into FMG's operations.

Both will be critical to the success of ongoing operations and the board has every confidence in their success.

Mr Watling will step down from FMG once Mr Hallam is fully settled in.

These changes in executive personnel come at a critical time for the Perth-based company having revealed its production by the end of the year was likely to be about 10 per cent below the 22 million tonne target, due to the planned shut down of its port and mine processing plant being brought forward.

Considering the uncertainty surrounding future econmoic conditions, this downturn adds to speculation that the company's full expansion to 55 million tonnes per annum may be in jeopardy.

Fortescue said it remains on track to achieve an annualised production rate of 45 million tonnes by the end of 2008 and still plans to step up to the 55 million tonnes mark by the end of the first quarter of 2009, subject to market conditions.

Just four weeks ago, it was reported that the Pilbara miner had sales at the end of September of $624 million - an increase of $432 million on the previous quarter.

Fortescue shipped its first ore to Chinese steel mills in May and had loaded 8.536 million tonnes onto 52 ships by the end of September.

At 1143 AEDT shares in FMG had fallen more than 15 cents, trading at $1.87.



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