Outgoing Fortescue Metals Group CEO Nev Power said despite the company having a record-breaking 2017, he wonders whether he could have done things better.
Power, who was speaking at a business lunch as part of the CCI Lighthouse Leadership series on November 16, said one of the key features of the Fortescue journey since 2003 was the speed at which it developed and produced from its mines in the Pilbara.
“That was a key marketing strategy. The development of iron ore mines has traditionally taken decades … Fortescue strategy was to accelerate that and bring it all together so we could reach the markets at the right time.
“While we have managed to do that much faster and set new industry standards, looking back I constantly ask myself the questions: Could we have done it faster, could we have done it better, could we have done it at lower cost and more efficiently?”
Power said FMG was now producing 170 billion tonnes a year and had a pipeline that would last decades. It could sustain the production rate or ramp up and expand as market conditions dictated.
“Our 2017 performance was a fantastic year for us at Fortescue. Every single part of the business performed well and either met or exceeded its targets. That meant our success in 2017 wasn’t due to some parts of the organisation, it was the entire Fortescue family that contributed.”
It hasn’t all been an easy ride for the company, which has only had two CEOs since it started in 2003 with Andrew Forrest preceding Power.
When asked what the defining moment of his career was, Power said it was the decision to restart construction of the Kings Valley iron ore mine six months after shutting it in 2012.
The company halted works on the mine when the iron or price collapsed and sacked 1000 workers.
“What happened in 2012, we accelerated something that probably would have happened over two or three years and we brought that into a few weeks,” Power told business leaders.
“One of the key decisions around that and one that I’m very grateful for the support of the board was to defer the construction of the Kings mine.
“There was a very large temptation not to bring that construction back but we did six months later and that was really one of the most defining points at Fortescue because that Kings mine was a critical part to us being able to bring new low-cost production on stream.
“It was the ability to blend between the Chichesters and the Solomon mine that allowed us to reconfigure our product strategy and go to a much lower cost and much more efficient operation.
“Bringing it back on after we’d stopped; at the time we agonised but looking back it was absolutely the right thing to do.”
Power, who was appointed in 2010 and steps down in February, said he will take a break.
Despite starting work at the age of 15, he’s never taken more than a three week block off, but has still managed to develop his aviation skills and help the family run a cattle station.
“I’ll pick a path for me over the next course of my career that will give me a balance between wanting to be involved and passionately part of something, but having a little bit more variety and discretion about how I spend my time.”
► Join us at our next Lighthouse Leadership Series on 4 December as we farewell CCI’s outgoing CEO Deidre Willmott – get your tickets here.