Andrew Forrest believes a Trump presidency won’t spark iron ore crash or dash FMG’s green energy hopes
Fortescue executive chair Andrew Forrest thinks Donald Trump is a “pragmatic economic guy” above all else, which he believes bodes well for Australia’s key commodity and his company’s own green energy ambitions.
This is despite conceding that Mr Trump is “very, very positive about fossil fuel”.
Australia’s richest man said the looming prospect of another Trump presidency in the US was not a negative, putting him at odds with WA Premier Roger Cook.
Mr Cook on Tuesday warned that a Trump victory would be a threat to Australian jobs.
“He (Trump) wants to kill the trade with China, so he wants to destroy any sort of trade links between the US and China,” Mr Cook said.
“China depends upon Western Australian iron ore . . . so in the event we have a Trump government that’s obviously a very concerning development.
“We are obviously vulnerable to any seismic shifts in the global trading market so to the extent that the Trump administration has suggested they want to kill off trade they are a threat to Western Australian jobs.”
The vast majority of iron ore produced from WA is sold to China. Both the State and Federal governments rely heavily on the royalty income and company tax received from those sales.
But Mr Forrest did not share the Premier’s sentiment, telling journalists after Fortescue’s annual general meeting in Perth on Wednesday that he was optimistic about what the future holds given Mr Trump is an “economic pragmatist”.
“The biggest surge in investment which the US has had, has of course been renewable energy, so he (Donald Trump) is going to keep that economic engine rolling,” he said.
“The biggest trading partner the United States has ever and will ever have is China, let’s not forget that they butter each other’s bread.
“The amount of horsepower in the tank of China’s economy and their ability to self-stimulate is phenomenal . . . so I’m not sharing (Cook’s) concerns.”
Mr Forrest conceded that Mr Trump, who has said the US should stick with fossil fuels for the foreseeable future, is not the climate warrior he is.
Fortescue is building a green hydrogen plant in the US state of Arizona and has set up a New York-based investment fund to help finance its lofty green energy ambitions.
Those ambitions came under some investor scrutiny at the company’s AGM, with one shareholder remarking that Fortescue has quietly lost nearly $2 billion over the past two years alone chasing its green energy dreams.
The company’s share price has fallen by more than a third since the start of this year.
Mr Forrest, who founded Fortescue and is the company’s largest shareholder, was also grilled about the adequacy of Fortescue’s corporate governance procedures.
Mineral Resources’ Chris Ellison and Wisetech’s Richard White are both founders and major shareholders of their respective ASX-listed businesses, and both men have been in hot water recently for alleged misuse of company resources.
Mr Forrest frequently uses a private jet owned by Fortescue, but claimed the arrangement is all above board.
“It (the jet arrangement) was set up years and years ago under a very tight chairman called Herb Elliot, and we obey the strictures of that governance to the letter,” he said.
Mr Forrest also pointed out that he does not earn a cent in remuneration, with the earnings he extracts from Fortescue coming solely from the dividend cheques he receives via his shareholding in the company.
“I don’t know if you’ve seen my pay packet recently, but it’s exorbitant, and I’m just loading myself up with options and shares and bonus and pay rises,” he said sarcastically.
“Our governance is so tight — you’ve seen on that board, the diversity on that board, the majority of non-executives, we run a very tight ship.”
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