Fortescue Metals : FY20 Sustainability Report

August 23, 2020 at 06:53 pm

Sustainability

Report

ABN 57 002 594 872

Y20 F

Global force | Thriving communities

Our Purpose

Global force | Thriving communities

Our Culture

We are a values-based business with a strong, differentiated culture. We believe that by leveraging

the unique culture of our greatest asset, our people, we will achieve our stretch targets.

Our Values

Safety		Family		Empowerment		Frugality		Stretch targets

Integrity	Enthusiasm		Courage and	Generating	Humility
	determination
		ideas

FY20

Year at a glance

2.4	A$17.2bn
Total Recordable Injury	Total global economic
Frequency Rate	contribution
14%	A$2.7bn
Aboriginal employment	Contracts to
rate across	Aboriginal businesses
Pilbara operations	and joint ventures
26%	A$6.6m
Female employment	Social investment in
rate in senior	our communities
leadership roles

review financial and	Operating Overview
sustainability	approach Our
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stakeholders	with Engaging

high Setting standards

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Fortescue Metals Group Ltd Sustainability Report FY20 1

About this report

Fortescue Metals Group Ltd (Fortescue) values its stakeholder relationships and is committed to open and transparent communication.

This report details Fortescue's performance against key material sustainability commitments and targets during the financial year 1 July 2019 to 30 June 2020 (FY20). It is part of our annual reporting suite which also includes the FY20 Annual Report, FY20 Climate Change Report and the FY20 Corporate Governance Statement, all of which are available on our website at www.fmgl.com.au

The report has been prepared for our stakeholders including employees, shareholders, community groups, government, customers and non-government organisations.

We are a signatory to the United Nations Global Compact (UNGC), and this report outlines our ongoing commitment to report progress towards the principles of the UNGC. The report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards core option. A copy of the GRI content index is provided on pages 107 to 112.

The report also considers issues identified through Fortescue's Risk Management Framework and guidance provided by key bodies including the International Council on Mining and Metals (ICMM).

This report captures our operations including those under exploration and development and those operated through subsidiaries and joint ventures where we have management control. All references to our, we, us, the Group and Fortescue refer to Fortescue Metals Group Ltd (ABN 57 002 594 872) and its subsidiaries. All references to a year are to the financial year ended 30 June 2020 unless otherwise stated.

Assurance

Management has sought independent, third party verification of a range of metrics in this report. This includes data on safety performance, Aboriginal employment, the Billion Opportunities initiative and gender diversity. Independent assurance on emissions data is discussed in our FY20 Climate Change Report.

Feedback

We value all feedback. Please forward any comments on this statement or requests for additional information to sustainability@fmgl.com.au

Contents


Overview	04


Operating and financial review	18


Our approach to sustainability	23


Corporate Governance	30


Setting high standards	39


Safeguarding the environment	68


Creating positive social change	85


Corporate Directory	106

Overview

Chief Executive	Elizabeth Gaines
Officer'smessage

Fortescue was founded on

the belief that the communities in which we operate should benefit from our success. Today, we are a global force, committed to empowering thriving communities.

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Building a strong business

FY20 was a year of record achievements for Fortescue, underpinned by the hard work and dedication of the entire Fortescue team.

The team has delivered strong results for the year, achieving our lowest Total Recordable Injury Frequency Rate (TRIFR) safety performance of 2.4, as well as record shipments of 178.2 million tonnes (mt), while maintaining our industry leading cost position of US$12.94/ wet metric tonne (wmt).

Our sustained focus on the economic success of our business allows us to contribute to our communities and societal outcomes more broadly.

The COVID-19 pandemic has caused unprecedented disruption to our homes and workplaces. We understand the ongoing impact of COVID-19 is challenging for many, especially small businesses, and we have implemented practical solutions to assist them as this global health and economic crisis continues.

We have also worked proactively and cooperatively with our industry peers to ensure support for local communities during the pandemic, including contributing to

a A$6.6 million donation to Lifeline, Foodbank and the Royal Flying Doctor Service (RFDS) facilitated by the Chamber of Minerals and Energy of Western Australia. Our additional A$1 million donation to the RFDS ensured it had the necessary resources, infrastructure, capital and people to safely deliver its range of 24/7 healthcare services for remote and regional West Australians.

Economic contribution

Fortescue continues to provide substantial contributions to the West Australian and Australian economy. In FY20, we made a total global economic contribution of A$17.2 billion including A$4.3 billion in government tax and royalty payments.

We recognise our role in reliably delivering iron ore shipments in the interests of maintaining jobs and the flows of taxes and royalties which contribute to economic activity at this time of critical national need.

Setting high standards

Fortescue is proud to be a leader in our community and we take our responsibility to set high standards seriously.

The health, safety and wellbeing

of the entire Fortescue family is our number one priority and we are committed to continuously improving as we strive to become global leaders in safety. This year, 96 per cent of our employees and contractors participated in our annual Safety Excellence and Culture Survey, providing valuable feedback on how we can continue to build on the culture that makes Fortescue a great and safe place to work.

Our strong and inclusive culture underpins our approach to diversity and increasing female and Aboriginal employment across Fortescue is a key priority. Our female employment rate increased in FY20 with females holding 19 per cent of total roles and 26 per cent of senior leadership roles.

During the year, the mining industry's approach to protecting Aboriginal heritage came into focus. Fortescue's seven Native Title Land Access Agreements and many dozens of Aboriginal heritage agreements have established detailed processes for the conduct of Aboriginal cultural heritage surveys, consultation, project planning, impact mitigation and negotiation. We have worked closely and transparently with Native Title Partners and with Traditional Knowledge Holders to avoid almost 6,000 significant heritage places.

with

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Overview | Operating and financial review

Safeguarding the environment

Fortescue has a proud history of setting stretch targets and during the year we announced an emissions reduction goal to achieve net zero operational emissions by 2040, positioning us as a leader in addressing the global climate change challenge.

Our success will be founded on practical initiatives that will allow us to achieve our targets in an economically sustainable manner. Since October 2019, Fortescue and our partners have announced investments in excess of

US$800 million in significant energy infrastructure projects which will deliver 25 to 30 per cent of our stationary energy requirements from solar power.

This year, we also released Fortescue's inaugural Climate Change Report which details our progress

in managing climate change-related risks and opportunities during FY20. The Report is available on our website at www.fmgl.com.au

Creating positive social change

We believe we are in a unique position to support remote Aboriginal communities and contribute to the vibrancy of regional centres by creating economic opportunity.

We support local businesses that in turn employ local people and we are building on this strong track record through our growth projects, Eliwana and Iron Bridge, which have to-date awarded over A$60 million in contracts to Aboriginal businesses.

Since Fortescue was founded by our Chairman, Dr Andrew Forrest AO in 2003, we have consistently provided significant training, employment and development opportunities

for Aboriginal people. We directly employ 844 Aboriginal people, representing 10 per cent of our Australian workforce and 14 per cent of our Pilbara operations workforce.

Our procurement initiative Billion Opportunities is building the capability and capacity of more than

120 Aboriginal businesses through the award of over A$2.7 billion

in contracts and subcontracts since 2011.

Our people

Fundamentally, our approach to sustainability is driven by our people and our Values. We are in a privileged position to empower individuals within our company and the community to be their best, to find innovative and practical solutions

to the most complex business and societal challenges and to improve the bottom line while delivering positive social change.

On behalf of the Core Leadership Team (CLT), I would like to thank the Fortescue family for their integrity, enthusiasm and determination to ensure our communities continue to thrive.

Training delivers life changing opportunities

To contribute to closing the gap between Aboriginal and non-Aboriginal Australians it is critical that Aboriginal people are empowered through training and employment opportunities which help them to become role models in their communities.

Fortescue's Vocational Training and Employment Centre (VTEC) was established in 2006 to drive real economic and generational change in the regions where we operate by providing training for guaranteed jobs. This year, we proudly celebrated the 900th Aboriginal person to be offered full time employment after successfully completing the program in either Karratha or Port Hedland.

We also celebrated a significant milestone for our Trade Up trainees. Established in 2015, Fortescue's Trade Up provides Aboriginal and female team members with an accredited pathway to an apprenticeship.

There are currently 122 participants completing the training.

At a ceremony in December, nine Trade Up participants from the inaugural intake joined 15 other

apprentices, together with our Founder and Chairman, Dr Andrew Forrest, members of the CLT and the Fortescue team in celebrating the completion of their apprenticeship and successfully gaining permanent employment with Fortescue.

VTEC and Trade Up are wonderful examples of how education and training drives sustainable change in people's lives, careers and communities.

6 Fortescue Metals Group Ltd Sustainability Report FY20

About Fortescue

A proud West Australian company, Fortescue Metals Group Ltd (Fortescue) is a global leader in the iron ore industry, recognised for its culture, innovation and industry-leading development

of world class infrastructure and mining assets in the Pilbara, Western Australia.

Operating Overview review financial and

approach Our sustainability

Since Fortescue was established by our Founder and Chairman

Dr Andrew Forrest AO in 2003, we have discovered and developed major iron ore deposits, constructed some of the most globally significant mines and have grown to be one of the world's largest producers of iron ore.

Delivering consistent operational excellence, our integrated mining, rail, shipping and marketing teams work together to export 175 to 180 million tonnes of iron ore annually (mtpa) and our commitment to technology and innovation ensures we remain one of the world's lowest cost iron ore producers.

Fortescue's wholly owned and fully integrated operations in the Pilbara include the Chichester and Solomon mining hubs and we are developing the Western Hub, home to the new Eliwana mine. The Iron Bridge Magnetite Project, an industry-leader in cost and energy efficiency, will be one of the highest-grade magnetite projects in the world.

Our mining hubs are connected to the five berth Herb Elliott Port and the Judith Street Harbour towage infrastructure in Port Hedland via

620 kilometres (km) of the fastest, heavy haul railway in the world, with an additional 143km under development to support Eliwana.

Our supply chain extends to our innovative tug fleet and the eight purpose-built 260,000 tonne capacity Fortescue Ore Carriers, which have been designed to complement the efficiency of our port and maximise the safety and productivity of Fortescue's operations.

The Fortescue Hive, our expanded Integrated Operations Centre, brings together our entire supply chain to deliver significant safety, productivity, efficiency and commercial benefits and will underpin our future use of technology including artificial intelligence and robotics.

Through our world class exploration capability together with our business development and projects focus, we are driving future growth, targeting the early stage exploration of commodities that support decarbonisation and the electrification of the transport sector.

We are undertaking exploration activities in New South Wales and South Australia, as well as in Ecuador and Argentina, and preliminary exploration activities on tenements that are in application in Colombia, Peru, Portugal and Kazakhstan, prospective for copper, gold and lithium.

Our longstanding relationships with customers in China have grown from our first commercial shipment of iron ore in 2008. Today, we are a core supplier of seaborne iron ore to China and have expanded into markets including Japan and South Korea.

In 2019, we established FMG Trading Shanghai (FMG Trading), a wholly owned Chinese sales entity, to support our customers through the direct supply of iron ore from regional Chinese ports, providing them with an option to purchase smaller volumes in renminbi.

Fortescue was founded on the belief that our communities should benefit from our success. Today, we are a global force, committed to empowering thriving communities, as we deliver training, employment and business development opportunities for Aboriginal people.

As a large consumer of energy, we have committed to an industry- leading carbon emissions target of net zero operational emissions by 2040. To achieve this, we are investing in practical initiatives such as the development of wind and solar energy, as well as gas and battery storage hybrid projects to displace our current thermal generation. We are also investigating the next phase of hydrogen and battery electric vehicle mobility.

Fortescue is a values-based business, committed to our strategic goals of ensuring balance sheet strength and flexibility, investing in the long-term sustainability of our core business while pursuing growth and development options and delivering enhanced returns to our shareholders.

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Overview | Operating and financial review

Value chain

Innovation in process and design has been a key component of Fortescue's strategy in challenging industry standards to more efficiently and effectively deliver its product suite from mine to market.

Modelling, planning and development

Processing

Ore processing facility design and wet processing optimise output

Blending and stockpiling

Port design facilitates blending and stockpiling of product suite

Marketing

Helping customers achieve best value in use

China port sales

FMG Trading

Shanghai Co. Ltd

(FMG Trading)

Exploration and discovery

Challenging geological thinking to identify valuable deposits

Extraction and recovery

Innovative use of technology suitable to Fortescue's deposits

Mine to port

Heavy haul rail at 42t axle load

Ship loading

3 shiploaders and

5 berths maximise outload capacity and utilisation

Shipping and towage

Delivery to Fortescue's international customers' specifications

8 Fortescue Ore Carriers

Towage fleet provides safe and reliable towage services

Rehabilitation

Mine closure and decommissioning

8 Fortescue Metals Group Ltd Sustainability Report FY20

Our Board overview

Fortescue has a talented and diverse Board committed to enhancing and protecting the interests of shareholders and other stakeholders and fulfilling a strong governance role.

Dr Andrew Forrest AO	Mark Barnaba AM	Elizabeth Gaines
Chairman	Lead Independent Director/	Chief Executive Officer/
	Deputy Chair	Managing Director

Lord Sebastian Coe CH, KBE	Jennifer Morris OAM	Dr Jean Baderschneider
Non-Executive Director	Non-Executive Director	Non-Executive Director

Penny Bingham-Hall	Dr Cao Zhiqiang	Dr Ya-Qin Zhang
Non-Executive Director	Non-Executive Director	Non-Executive Director

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Overview | Operating and financial review

The appointment and reappointment of directors is intended to maintain and enhance the overall quality of the Board through a composition which reflects a diversity of skills, ethnicity, experience, gender and age.

The primary driver for the Board in seeking new directors is skills and experience that are relevant to the needs of the Board in discharging its responsibilities to shareholders. All new Board members benefit from a comprehensive induction process that supports their understanding of Fortescue's business.

Fortescue's policy is to assess all potential Board candidates without regard to race, gender, age, physical ability, sexuality, nationality, religious beliefs, or any other factor not relevant to their competence and performance.

There is also a range of support given to Board members which enables them to stay strongly connected to Fortescue, its culture and Values.

This support includes:

Opportunities for significant contribution to the annual strategy setting process conducted with executive and senior management
Regular briefings from executive and senior management regarding all major business areas, tailored

site visits and annual site tours to operations

Visits to meet with key customers that strengthen their understanding of the Company's key markets
Regular formal and informal opportunities for the directors to meet with management and staff.

The Board has established Committees to assist in the execution of its duties and to ensure that important and complex issues are given appropriate consideration. The primary Committees of the Board are the Remuneration and People Committee, the Audit and Risk Management Committee, the Nomination Committee and the Finance Committee.

Each Committee has a non-executive Chair and operates under its own Charter which has been approved by the Board.

Directors are expected to act independently and ethically and comply with all relevant requirements of the Corporations Act 2001, ASX Listing Rules and the Company's Constitution.

The Company actively promotes ethical and responsible decision making through its Values and Code of Conduct and Integrity that embodies these Values.

The Board and each of its Committees have established a process to evaluate their performance annually. The process is based on a formal questionnaire covering a range of performance topics. The process is managed by the Company Secretary under the direction of the Lead Independent Director. The most recent review was undertaken in June 2020.

The results and recommendations from the evaluation of the Board and Committees are reported to the full Board for further consideration and action, where required.

At the date of this report, the Board has eight non-executive directors and one executive director, being the Chief Executive Officer, Elizabeth Gaines. The Board believes that an appropriate mix of non-executive and executive directors is beneficial to its role and provides strong operational and financial insights to support the business.

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Dr Andrew Forrest AO

Chairman

Appointed Chairman in July 2003; Assumed role of Chief Executive Officer in 2005; Resumed non- executive responsibilities in July 2011.

Dr Forrest is Australia's most active philanthropist and one of the most effective business leaders of his generation.

As Fortescue's Founder and Chairman, he has led the Company from inception to its Top 10 status on the Australian Stock Exchange, during which time Fortescue invested more than US$27 billion in the resources sector.

In 2001, Dr Forrest co-founded the Minderoo Foundation with his wife Nicola. It has supported over 300 initiatives across Australia and internationally in pursuit of a range of causes. In April 2020, the Forrests announced one of Australia's largest private philanthropic donations of A$520 million, and have continued giving, with their total philanthropic donations now exceeding A$2 billion.

Dr Forrest recently completed a PhD in Marine Ecology and is passionate about ocean conservation. Prior to that he was awarded an honorary doctorate by the University of Western Australia. He is an Adjunct Professor of the Central South University in China and a lifetime Fellow of the Australian Institute of Mining and Metallurgy.

In 2019, he was announced as an IUCN Patron of Nature and is a member of the United Nations (UN) Environment Programme Scientific Advisory Committee on the Assessment on Marine Litter and Microplastics.

He is Co-Chairman of the Senior Business Leaders' Forum, the leading formal dialogue for China and Australia's most senior business leaders.

In 2017, Dr Forrest was appointed an Officer of the Order of Australia (AO) for distinguished service to the mining sector, to the development of employment and business opportunities, as a supporter of sustainable foreign investment, and to philanthropy.

He is Global Patron of the Centre for Humanitarian Dialogue, recipient of the Australian Sports Medal and the Australian Centenary Medal, and Vice- Patron of the SAS Resources Fund.

He was a Councillor of the Global Citizen Commission, charged by the UN, to modernise the Universal Declaration of Human Rights presented to the UN Secretary General in April 2016. Dr Forrest was appointed by the Prime Minister and Cabinet of Australia to chair the Review of Indigenous Training and Employment Programmes, to end Indigenous disparity through employment; its recommendations are being slowly implemented.

He was Western Australia's 2017 Australian of the Year for his outstanding contribution to the community. In 2018, Dr Forrest was inducted into the Australian Prospectors & Miners' Hall of Fame and was the inaugural winner of the EY Global Entrepreneur of the Year Social Impact Award.

Committee memberships: Finance Committee (Chair), Nomination Committee

Mark Barnaba AM CitWA

Lead Independent Director/

Deputy Chair

Deputy Chair since November 2017; Lead Independent Director since November 2014; Non-Executive Director since February 2010.

Mr Barnaba is a career investment banker, having focused predominatly in the natural resources sector.

Mr Barnaba spent most of his career with companies he founded, led and then sold - GEM Consulting and Azure Capital (both independent corporate advisory firms which provide financial, corporate and strategic advice to companies, governments and institutions in the Asia Pacific region), McKinsey

Company (both in Australia and overseas) and in several senior executive roles at Macquarie Group (one being the Chairman and

Global Head of the Natural Resources Group). He has previously chaired the State Theatre Company of Western Australia, the West Coast Eagles (an Australian Rules Football League team) and several large publicly listed (ASX) companies within the mining and infrastructure sectors.

He is also a member of the Board (and Chairman of the Audit Committee)

of the Reserve Bank of Australia and was the inaugural Chairman of the University of Western Australia Business School Board from 2002 to 2020 and now holds the title of (inaugural) Emeritus Board Member, also serving as an Adjunct Professor in Finance.

Mr Barnaba also chairs GLX (a specialist technology company that develops software based marketplace solutions for commodity markets) and the Hospital Benefit Fund (HBF) Investment Committee, is a member of the Senior Advisory Board of Appian Capital (a London based pure-play mining private equity fund), is a member of the Board of The Centre for Independent Studies and is a senior fellow at EY (Oceania).

Mr Barnaba holds a Bachelor of Commerce (First Class Honours and University Medal) from the University of Western Australia, an MBA from Harvard Business School (High Distinction; Baker Scholar) and an Honorary Doctor of Commerce from the University of Western Australia. He has lived in Australia, the United States, Italy, the United Kingdom and South Africa.

Committee memberships: Audit and Risk Management Committee (Chair), Nomination Committee, Remuneration and People Committee (Member), Finance Committee (Member)

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Overview | Operating and financial review

Elizabeth Gaines

Chief Executive Officer/Managing Director

Chief Executive Officer since February 2018 and Executive Director since February 2017; Former Non-Executive Director from February 2013 to February 2017.

A highly experienced business leader with extensive international experience as a Chief Executive Officer and group executive,

Ms Gaines has a proven track record in financial and operational leadership across a number of industries, including resources, construction and infrastructure, financial services and travel and hospitality.

After joining Fortescue as a Non- Executive Director in February 2013, Ms Gaines was appointed Chief Financial Officer and Executive Director in February 2017. She is a former Chief Executive Officer of Helloworld Limited and Heytesbury Pty Limited and has also held the position of Chief Financial Officer at Stella Group and Entertainment Rights plc.

Ms Gaines was ranked second on the 2019 Fortune Magazine Businessperson of the Year list, and in 2020 the Chamber of Minerals and Energy of Western Australia awarded her the 'Women in Resources Champion' at their annual Women in Resources Awards.

She has significant exposure to the impact of the growth in Asian economies, particularly China, on the Australian business environment and economy as well as a deep understanding of all aspects of financial and commercial management at a senior executive level in both listed and private companies.

Ms Gaines holds a Bachelor of Commerce and Masters of Applied Finance and, in 2019, was awarded an Honorary Doctorate of Commerce by Curtin University. She is a member of

Lord Sebastian Coe CH, KBE

Non-Executive Director

Non-Executive Director since February 2018.

Lord Coe is currently a senior advisor with Morgan Stanley & Co International plc and a Non-Executive Director of the Vitality Group of health and life insurance companies. In 2017, he became Chancellor of Loughborough University having previously served as Pro Chancellor of the University.

Based in the United Kingdom, Lord Coe is the Non-Executive Chairman of CSM Sport and Entertainment, within the Chime Communications group. He was elected President of World Athletics in 2015 where he is driving significant governance reforms through the organisation and its 214 Member Federations around the world. He is currently serving his second term as President.

Lord Coe previously served as Chairman of the British Olympic Association and was Chairman of the Organising Committee for the London 2012 Olympic Games and Paralympic Games. He was a member of the British athletics team at the 1980 and 1984 Olympic Games where he won two gold and two silver medals, as well as breaking 12 world records.

In 1992, Lord Coe became a Member of Parliament and during his political career served as a Government Whip and then Private Secretary to William Hague, Leader of the Opposition and Leader of the Conservative Party. He was appointed to the House of Lords in 2000.

Committee memberships: Nomination Committee (Chair)

Dr Jean Baderschneider

Non-Executive Director

Non-Executive Director since January 2015.

A highly regarded leader in both business and civil society,

Dr Baderschneider brings 35 years' of extensive international experience in procurement, strategic sourcing and supply chain management along with a deep understanding of high-risk operations and locations and complex partnerships.

Dr Baderschneider retired from ExxonMobil in 2013 where she was Vice-President of Global Procurement. During her 30-year career, she was responsible for operations all over the world, including Africa, South America, the Middle East and Asia.

A past member of the Board of Directors of the Institute for Supply Management and the Executive Board of the National Minority Supplier Development Council, Dr Baderschneider also served on the boards of the Center of Advanced Purchasing Studies and the Procurement Council of both The Conference Board and the Corporate Executive Board.

In February 2011, she was the Presidential appointee to the US Department of Commerce's National Advisory Council of Minority Business Enterprises. She holds a Master's Degree from the University of Michigan and a PhD from Cornell University.

Dr Baderschneider is the recipient of Cornell's Jerome Alpern Award and the Nomi Network's Corporate Social Responsibility Award.

Committee memberships: Audit and Risk Management Committee

Chartered Accountants Australia and

New Zealand, the Australian Institute

of Company Directors and Chief

Executive Women.

Ms Gaines has previously held Non- Executive Director roles with NEXTDC Limited, Mantra Group Limited, Nine Entertainment Co. Holdings Limited and ImpediMed Limited.

Cameron Wilson

Company Secretary

Mr Wilson was appointed Company Secretary in February 2018, bringing over 20 years' mining industry experience across the gold, nickel, coal and mineral sands sectors.

Mr Wilson holds a Bachelor of Laws from the University of Western Australia and is a Graduate of the Australian Institute of Company Directors.

12 Fortescue Metals Group Ltd Sustainability Report FY20

Dr Cao Zhiqiang

Non-Executive Director

Non-Executive Director since January 2018 (nominated director from Hunan Valin Iron and Steel Group Company Ltd).

Dr Cao is currently the Chairman of Hunan Valin Iron and Steel Group Company Ltd and brings extensive experience in technology and steel mill management, along with a deep background in international cooperation.

of the Financial Services Institute of Australasia and a member of Chief Executive Women and Corporate Women Directors.

Other current directorships (ASX listed entities):

BlueScope Steel Limited (Non- Executive Director); Dexus Property Group (Non-Executive Director).

Committee memberships: Audit and Risk Management Committee (Member), Remuneration and People Committee (Member), Finance Committee (Member)

Dr Zhang has served on the Board of Directors of Chinasoft International Ltd (HKEX: 354) and AsiaInfo Technologies Ltd (HKEX: 1675). He serves on the Board of Stewardship for the Future of Mobility of the Davos World Economic Forum and Chairman of the Apollo Alliance, the largest open platform for autonomous driving in the world. Dr Zhang received his Bachelor's and Master's degree in Electrical Engineering from the University of Science and Technology of China, and a PhD in Electrical Engineering from George Washington University.

Operating Overview review financial and

approach Our sustainability

Dr Cao joined Valin Xiangtan Steel in 1997 and has worked in a variety of roles including Director of the Research and Development Centre, before being appointed Chief Executive Officer. He holds a PhD in Science and is a senior engineer research fellow.

Penny Bingham-Hall

Non-Executive Director

Non-Executive Director since November 2016.

Ms Bingham-Hall has over 30 years' experience in senior executive and non-executive roles in large ASX listed companies. She is a Non- Executive Director of Macquarie Specialised Asset Management, Taronga Conservation Society Australia, Supply Nation and the Crescent Foundation. She is also Chair of the NSW Freight and Logistics Council.

Ms Bingham-Hall has worked in the construction, infrastructure, mining and property industries across Australia and the Asian region. She has a particular interest in environmental sustainability, workplace safety and Indigenous employment.

Prior to becoming a company director, Ms Bingham-Hall was Executive General Manager, Strategy at Leighton Holdings (now CIMIC)

Australia's largest construction, mining services and property group. As part of the leadership team at Leighton she had responsibilities across the group's Australian and Asian operations.

Ms Bingham-Hall has a Bachelor of Arts in Industrial Design, is a Fellow of the Australian Institute of Company Directors, a Senior Fellow

Dr Ya-Qin Zhang

Non-Executive Director

Non-Executive Director since August 2019.

Dr Ya-Qin Zhang is a renowned scientist, technologist and business executive. He is the founder and Chairman of Blue Entropy LLC, a Seattle-based technology consulting firm. He joined Tsinghua University as the Chair Professor of AI Science in 2020, starting the Tsinghua Institute for AI Industry Research (AIR). Dr Zhang was President of Baidu Inc. (NASDAQ: BIDU) from September 2014 to October 2019, a leading Chinese multinational technology company specialising in Internet- related services, mobility, artificial intelligence and cloud computing. Prior to joining Baidu, he was a key executive of Microsoft Corporation for 16 years, including Corporate Vice President for Mobile and Embedded Products, Managing Director of Microsoft Research Asia and Chairman of Microsoft China.

Dr Zhang has made significant contributions to digital media, AI, autonomous driving and cloud computing industries, with over 60 granted US patents, 500 peer-reviewed publications,

and numerous contributions to international standards. Dr Zhang was inducted into the American Academy of Arts and Sciences (AAAS) in

2019 and the Australian Academy of Technology and Engineering (ATSE) as the only foreign fellow in 2017, and became a Fellow of the Institute of Electrical and Electronics Engineers (IEEE) in 1997 at the age of 31, making him the youngest scientist winning this honour in the 100+ year history of the organisation.

Jennifer Morris OAM

Non-Executive Director

Non-Executive Director since

November 2016.

Ms Morris is currently the National Director of Strategy for Cannings Purple, one of Australia's leading

fully integrated strategic communications consultancies. Prior to joining Cannings Purple, Ms Morris was a consulting partner at Deloitte, and more recently the CEO of Walk Free, the Minderoo Foundation's global initiative against slavery. She is currently a Non- Executive Director of the Australian Sports Commission.

Ms Morris has key experience in advising government entities and corporations on strategy development, governance controls, complex

large scale business transformation, the embedding of environment, social and governance policies and the understanding of high-performance environments.

A former member of the Australian Women's Hockey Team, Ms Morris won Olympic gold medals at the Atlanta 1996 and Sydney 2000 Olympic Games. In 1997, she was awarded a Medal of the Order of Australia (OAM).

Ms Morris is a member of the Australian Institute of Company Directors, a Fellow of Leadership WA and a member of the Vice Chancellor's List, Curtin University. She holds a Bachelor of Arts (Psychology and Journalism) received with Distinction and has completed Finance for Executives at INSEAD.

Committee memberships: Remuneration and People Committee (Chair), Audit and Risk Management Committee (Member)

Governance Corporate

with Engaging stakeholders

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 13

Overview | Operating and financial review

Core

Leadership

Team

L to R: CEO Elizabeth

Gaines, Deputy CEO Julie

Shuttleworth, COO Greg

Lilleyman, CFO Ian Wells.

Elizabeth Gaines

Chief Executive Officer

Ms Gaines commenced as Chief Executive Officer in February 2018.

A highly experienced business leader with extensive international experience as a Chief Executive Officer and group executive,

After joining Fortescue as a Non-Executive Director in February 2013, Ms Gaines was appointed Chief Financial Officer and Executive Director in February 2017. She is a former Chief Executive Officer of Helloworld Limited and Heytesbury Pty Limited and has also held the position of Chief Financial Officer at Stella Group and Entertainment Rights plc.

Ms Gaines holds a Bachelor of Commerce and Masters of Applied Finance and, in 2019, was awarded an Honorary Doctorate of Commerce by Curtin University. She is a member of Chartered Accountants Australia and New Zealand, the Australian Institute of Company Directors and Chief Executive Women.

Greg Lilleyman

Chief Operating Officer

Mr Lilleyman commenced as Chief Operating Officer in February 2018, after joining Fortescue as Director Operations in January 2017.

With three decades of extensive international experience in the mining sector, across multiple commodities in large scale project development and construction, operational and business leadership, joint venture management and technology deployment,

Mr Lilleyman brings significant business credentials and over 20 years' iron ore market knowledge to Fortescue's Core Leadership Team.

Mr Lilleyman holds a Bachelor of Construction Engineering from Curtin University and has completed the Vincent Fairfax Fellowship in Ethical Leadership at the University of Melbourne, as well as the prestigious Wharton Business School's Advanced Management Program.

He is a member of the Australian Institute of Mining and Metallurgy, the Australian Institute of Company Directors and a Fellow of the Australian Institute of Management. Mr Lilleyman has recently been appointed to the Board of the University of Western Australia Business School.

14 Fortescue Metals Group Ltd Sustainability Report FY20

Ian Wells

Chief Financial Officer

Mr Wells commenced as Chief Financial Officer in February 2018 having responsibility for the Fortescue Group capital management strategy, core finance functions including reporting, tax and treasury, together with Group procurement and logistics, and technology and autonomy. Mr Wells is a Director of a number of Fortescue's subsidiaries and is a member and alternate chair of the Iron Bridge Joint Venture Committee.

Since joining Fortescue in 2010, he has held multiple senior executive roles in the Group Finance Leadership team, including Group Manager Corporate Finance, leading Fortescue's capital management strategy, Group Manager Planning and Analysis and he also held the position of Company Secretary.

Mr Wells' prior experience includes financing Fortescue's major iron ore project development, leading multi-billion dollar capital raising and refinancing transactions in domestic and international capital markets.

With more than 25 years' experience as a senior executive in leading ASX listed and private companies in the mining, energy infrastructure and healthcare industries, Mr Wells' prior positions include Chief Financial Officer of Singapore Power subsidiary Jemena Limited and Acting Chief Financial Officer of Alinta Limited.

Mr Wells holds a Bachelor of Business in Accounting, is a Fellow of CPA Australia, a Certified Finance and Treasury Professional and a Graduate of the Australian Institute of Company Directors. Mr Wells is Chairman of The Salvation Army's WA Corporate & Philanthropic Council.

Julie Shuttleworth

Deputy Chief Executive Officer

Ms Shuttleworth commenced as Deputy Chief Executive Officer in February 2018.

Having joined Fortescue in 2013, Ms Shuttleworth has held General Manager roles at both Fortescue's Cloudbreak and Solomon mines.

Ms Shuttleworth holds a double major in Extractive Metallurgy and Chemistry from Murdoch University and has 26 years' experience in the mining industry in Australia, China, Tanzania and South America, including 19 years in gold/ copper working for Newcrest Mining, Sino Mining and Barrick Gold, and seven years' iron ore experience with Fortescue.

Ms Shuttleworth is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy, a Graduate Member of the Australian Institute of Company Directors, a member of Chief Executive Women, a member of the Institution of Engineers Australia and she is on the International Committee of the Society for Mining, Metallurgy and Exploration. She has attended Harvard Business School and INSEAD Business School, holds diplomas in Financial Markets and Management, and sponsors the Julie Shuttleworth Prize in Mineral Processing at Murdoch University.

Fortescue Metals Group Ltd Sustainability Report FY20 15

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Operating Overview review financial and
sustainability	approach Our
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stakeholders	with Engaging

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Overview | Operating and financial review

Executive team

Fortescue's Executive Team is accountable for the safety of its people, upholding the Company's Values, and acting with integrity and honesty.

Danny Goeman	Peter Huston	Don Hyma
Director Sales and Marketing	Director Corporate Development,	Director Projects
	Legal and Strategy

Tim Langmead	Linda O'Farrell	Fernando Pereira
Director Community, Environment	Director Fortescue People	Director Pilbara Operations
and Government

Alison Terry	Rob Watson
Director Sustainability and	Director Health and Safety
Corporate Affairs and Joint Company
Secretary

16 Fortescue Metals Group Ltd Sustainability Report FY20

Danny Goeman

Director Sales and Marketing

Mr Goeman was appointed Director Sales and Marketing in August 2018.

Mr Goeman has more than 25 years of experience in management, sales and marketing, strategy development and high level commercial negotiations including more than

20 years with the Rio Tinto group of companies.

Mr Goeman has a wealth of experience in leading commercial transactions in different regions including Australia, Asia, Europe and Africa, and has experience in a range of commodities including diamonds, iron ore, coal and potash. Mr Goeman has a Master's degree in Business Administration.

Peter Huston

Director Corporate Development, Legal and Strategy

Mr Huston joined Fortescue in 2005 and has over 20 years' experience in legal and corporate advisory roles.

Prior to joining Fortescue,

Mr Huston spent 12 years as a Partner of the law firm now known as Norton Rose Fulbright. He then spent over a decade in Activist Private Equity as an Executive Director at Troika Securities Limited.

Mr Huston is admitted as a Solicitor and Barrister of the Supreme Court of Western Australia, the Federal and High Court of Australia and has a Bachelor of Jurisprudence, Bachelor of Laws (with Honours), Bachelor of Commerce and a Master of Laws.

Don Hyma

Director Projects

Mr Hyma joined Fortescue in early 2019 as Project Director Iron Bridge before moving into the role of Director Projects in October 2019. He has over 25 years of progressive capital project experience in the resources sector in Canada, Chile, New Caledonia and Australia.

Prior to joining Fortescue, Mr Hyma held senior management positions with Rio Tinto, including Vice President Projects Iron Ore in Canada and General Manager

Pilbara Growth in Western Australia, as well as Chief Technical Officer for Mitsui & Co. He has extensive experience in managing large, complex capital projects, particularly those implemented under joint ventures and involving multiple stakeholders.

Tim Langmead

Director Community, Environment and Government

Mr Langmead joined Fortescue as Group Manager Corporate Affairs in January 2013 and from January 2014 served as Director External Relations before being appointed to his current role.

Previously, Mr Langmead held senior corporate affairs roles in the Australian business units of global oil and gas companies. Mr Langmead served in senior staff roles for Ministers in the Howard-Anderson and Howard-Vaile governments and commenced his career as an agribusiness journalist.

Linda O'Farrell

Director Fortescue People

Ms O'Farrell joined Fortescue in October 2013 as Group Manager Fortescue People, joining the Executive team in December 2014.

Having held a number of executive human resources roles in major Australian resource companies, Ms O'Farrell brings deep experience in strategic people management, diversity and Aboriginal employment.

Ms O'Farrell holds a Bachelor of Economics (Honours in Industrial Relations) from the University of Western Australia. She is a Director at the Australian Institute of Management Western Australia (AMMA), the Australian Resources and Energy Group and Lifeline Australia.

Fernando Pereira

Director Pilbara Operations

Mr Pereira was appointed Director Pilbara Operations in June 2019, having started his career at Fortescue in 2010 and has previously led the Company's Port and Rail

Operations and Asset Management teams.

Mr Pereira has more than 19 years' experience in the mining industry, spanning various commodities and operations in Australia and South America. He has expertise in senior management, mining and mineral engineering, supply chain optimisation and overseeing mechanical, structural and expansion projects.

Mr Pereira holds a Bachelor in Mining and Mineral Processing Engineering with a specialisation in Business Management.

Alison Terry

Director Sustainability and Corporate Affairs and Joint Company Secretary

Ms Terry joined Fortescue in 2014 as Group Manager Corporate Affairs and serves as Joint Company Secretary, having been appointed to the role in February 2017.

With significant experience in corporate affairs, legal, company secretarial and general management, Ms Terry has previously held senior executive and Board roles across

a number of sectors including automotive, telecommunications and superannuation. Ms Terry holds a Bachelor of Economics and Bachelor of Laws (Honours) and a Graduate Diploma of Business (Accounting).

She is a member of Chief Executive Women, a Graduate of the Australian Institute of Company Directors and a Director of the Black Swan State Theatre Company of Western Australia.

Rob Watson

Director Health and Safety

Mr Watson was appointed Director Health and Safety in July 2020 after joining Fortescue in 2011. Prior to this, Mr Watson spent 15 years in a number of senior corporate health and safety roles in large mining companies.

Mr Watson's career in health and safety spans over 25 years in a number of industries and commodities.

Mr Watson holds a Master's in Occupational Health and Safety.

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stakeholders	with Engaging

high Setting standards

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Fortescue Metals Group Ltd Sustainability Report FY20 17

Overview | Operating and financial review

178.2mt

Shipped

US$

12.8bn

Revenue

US$	US$
12.94/wmt 4.9bn
C1 costs	Cash on hand

US$	US$
0.3bn
5.1bn
Gross debt	Net debt

Operating and financial review

Overview of operations

As one of the world's largest producers of iron ore, Fortescue's wholly owned and integrated operations in the Pilbara include the Chichester and Solomon mining hubs and the Western Hub, which is currently under development.

Our mining infrastructure is connected to the five berth Herb Elliott Port and Judith Street Harbour towage facility in Port Hedland via the fastest, heavy haul railway in the world.

Operating Overview review financial and

approach Our sustainability

Chichester Hub

Our Chichester Hub in the Chichester Ranges, comprising the Cloudbreak and Christmas Creek mines, has an annual production capacity of approximately 100mtpa from three Ore Processing Facilities (OPFs).

Consistent and sustained output delivered from the OPFs has allowed us to optimise our product strategy through enhanced blending and beneficiation, increasing iron upgrades and reducing impurities. This has contributed to lower mining cut-off grades, as we optimise ore bodies with sustainably lower strip ratios.

The Christmas Creek OPF infrastructure is being upgraded to include a Wet High Intensity Magnetic Separator (WHIMS) plant to further maximise production rates and enhance the value of our ore. The WHIMS construction will be completed by the end of 2020.

Cloudbreak utilises relocatable conveyors which can be moved, lengthened or shortened once an area is mined. The conveyors now cover 10km, extended from the initial 5km length due to the success and efficiency of this innovative infrastructure.

Solomon Hub

The Solomon Hub in the Hamersley Ranges is located 60km north of Tom Price and 120km to the west of our Chichester Hub. It comprises the Firetail and Kings Valley mines which together have a production capacity of 75mtpa.

Solomon represents a valuable source of production by blending higher iron grade, low cost Firetail ore with low phosphorous Chichester ore to create Fortescue Blend. The current operation will expand to include the Queens Valley mining area to maintain production of the Kings Fines product.

Western Hub

Fortescue is developing the Western Hub, which includes significant amounts of high iron content bedded iron ore and will be home to the Eliwana mine. Located 140km to the west of Solomon and due to be completed in December 2020, the Eliwana project includes 143km of rail and a 30mtpa dry OPF.

Eliwana will contribute to Fortescue's core iron ore business as it underpins the ramp up of our

60.1% Fe West Pilbara Fines product. The operation will maintain our low cost status, providing greater flexibility to capitalise on market dynamics.

Hedland Operations

Fortescue wholly owns and operates our purpose designed rail and port facilities, constructed to deliver iron ore from our mines to Port Hedland for shipment to our customers. Covering 620km of track, with the additional 143km under construction for Eliwana, our railway is the fastest, heavy haul line in the world.

The efficient design and layout, optimal berthing configuration and ongoing innovation to increase productivity makes Fortescue's Herb Elliott Port the most efficient bulk port operation in Australia. The port has five operating berths with our current infrastructure capable of safely and efficiently exporting in excess of 180mtpa.

The Judith Street Harbour towage infrastructure and our fleet of tugs provides safe and reliable towage services that maximise the efficiency of our operations, while offering competitive third party towage services within the port.

Governance Corporate

with Engaging stakeholders

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 19

Overview | Operating and financial review

	Port Hedland
	HERB ELLIOTT PORT
Karratha Roebourne	Concentrate pipeline
	Marble Bar
	IRON BRIDGE

	SOLOMON HUB	Nullagine	Pilbara
	Western Australia
		CHICHESTER HUB
Eliwana	Firetail	Cloudbreak	Current operations
	Kings	Christmas Creek	Under development
WESTERN HUB and Queens
NYIDINGHU
	Tom Price

Newman

Shipping

Designed to complement our port infrastructure, the fleet of eight 260,000 tonne capacity Fortescue Ore Carriers deliver approximately 14 per cent of our shipping requirements, while improving load rates, efficiencies and reducing operating costs. Our shipping fleet completes our mine to market supply chain.

Iron Bridge Magnetite Project

The US$2.6 billion Iron Bridge Magnetite Project is under development and will deliver 22mtpa of high grade 67% Fe magnetite concentrate product, further enhancing the range of products available to our customers.

Iron Bridge, located 145km south of Port Hedland and incorporating the world class North Star and Glacier Valley Magnetite ore bodies, is an unincorporated joint venture between Fortescue's subsidiary FMG Iron Bridge and Formosa Steel IB. Baosteel also has an interest in the Project, as a minority shareholder of FMG Iron Bridge.

The innovative process design, including the use of a dry crushing and grinding circuit, will deliver globally competitive capital intensity and operating costs.

Sales and marketing

Fortescue has an integrated operating and marketing strategy, focused on meeting the needs of our customers while maximising value. In 2019, we established FMG Trading, a wholly owned Chinese sales entity which supplies our products directly to Chinese steel mills from regional ports.

The introduction of portside sales has allowed us to enhance our service to small and medium-sized customers through direct supply in renminbi from regional Chinese ports, complementing our existing contractual seaborne arrangements.

World leading technology

Fortescue was the first company in the world to deploy Caterpillar (CAT) autonomous haulage on a commercial scale when trucks fitted with autonomous haulage system (AHS) technology began operating at the Solomon Hub in 2012. Today, our AHS deployment represents the largest fleet conversion to autonomous haulage in the industry and demonstrates our unique capability to manage and operate a multi-class truck size autonomous haulage site.

When our Train Control Centre opened in 2009, we were the first operation in Western Australia to control a railway from outside the region. Now known as the Fortescue Hive, the expanded, purpose-built remote operations facility was opened in 2020 and includes our planning, operations and mine control teams, together with port, rail, shipping and marketing teams. The newly refurbished space allows team members across our complete supply chain to work together, 24 hours a day, seven days a week, to deliver improved safety, reliability, efficiency and commercial outcomes.

The Fortescue Hive underpins our future use of technology including artificial intelligence and robotics and will evolve to include the generation and integrated distribution network for the Pilbara Energy Connect, our hybrid solar gas power solution.

20 Fortescue Metals Group Ltd Sustainability Report FY20

Energy infrastructure

Since October 2019, Fortescue and our partners have announced investments in excess of

US$800 million in significant energy infrastructure projects which will increase our use of renewable energy, a key contributor to our pathway to achieve our emissions reduction targets.

The Pilbara Energy Connect (PEC), together with the Chichester Solar Gas Hybrid Project, will deliver

25 to 30 per cent of our stationary energy requirements from solar power. The PEC leverages existing assets and provides Fortescue with a hybrid solar gas energy solution that enables the delivery of stable, low cost power and supports the incorporation of additional large scale renewable energy in the future.

The new infrastructure builds on our previous energy initiatives including the construction of the Fortescue River Gas Pipeline, the conversion of the Solomon Power Station from diesel to gas generation, as well as a partnership agreement with the Commonwealth Scientific and Industrial Research Organisation (CSIRO) to develop and commercialise hydrogen technology.

Exploration

Fortescue began as an exploration company and today our iron ore tenements remain key to maintaining mine life and sustaining product quality in our core iron ore business.

The resources in the Western Hub and Solomon Hub add high iron content, dry, low cost tonnes to our product suite, providing further optionality for the business.

Recent Australian exploration activity has been primarily focused on early stage target generation for copper-gold in the Paterson and Rudall regions in Western Australia, with additional exploration activity underway in New South Wales and South Australia.

International footprint

We recognise that early stage exploration can unlock significant value and our world class exploration capability is driving future growth as we target global opportunities and commodities that support decarbonisation and electrification of the transport sector.

Fortescue has a well-established presence in Ecuador, where we have concessions prospective for copper in exploration phase covering 135,000 hectares and in Argentina we currently hold 450,000 hectares of tenements, prospective for copper-gold.

We are also assessing exploration and development opportunities in Colombia, Chile and Peru, as well as Portugal and Kazakhstan.

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Operating Overview review financial and
sustainability	approach Our
	to
	Governance Corporate
stakeholders	with Engaging

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 21

Our approach to sustainability

In its short history, Fortescue has accomplished what was judged as impossible: to build a company from a start up to a global leader in the mining industry.

2003

2006

2008

2011

THE	Fortescue's Vocational	A$150,000 Community	Commenced the Billion
DREAM	Training and Employment	Grants Program established	Opportunities Program
Centre (VTEC) established
BEGINS

2013

2015

2016

2017

Billion Opportunities	Northern Spirits recognition	Commitment to the UNGC	Published inaugural Corporate
Program reached	program established	Principles and SDGs	Social Responsibility Report
A$1 billion in contracts		Tenth anniversary of	Fortescue Family Room at the

		Fortescue's VTEC	Fortescue Centre in Perth opened
		Board reached gender parity	Climate Change Committee
			established
			Audit and Risk Management
			Committee assigned
			responsibility for overseeing
			material issues and
			sustainability targets

2017

2018

2019

2020

Partnered with ANZ to initiate a A$50 million funding scheme for Aboriginal businesses

Landmark hydrogen partnership with CSIRO announced

Dedicated Modern Slavery Committee and Working Group established

Published inaugural Modern Slavery Statement

Chichester Solar Gas Hybrid Project announced

Signed ParityPledge

Established In-Home Childcare for Port Hedland employees

Added to Dow Jones Sustainability World Index

Fortescue's VTEC celebrated its 900th job for Aboriginal people

Formation of a Sustainability Committee and dedicated Plastics Reduction Committee

Published inaugural Climate Change Report

THE JOURNEY CONTINUES

22 Fortescue Metals Group Ltd Sustainability Report FY20

Our approach to sustainability

Our Values form the foundation of our approach to sustainability

Our approach to sustainability

Sustainability is integrated into all aspects of our business.

At the heart of our approach to sustainability is a commitment to create value for our stakeholders, protect the health and safety of our Fortescue family and support the communities and environments in which we operate.

Our Values form the foundation of our approach to sustainability and integrity is key to building trust with our stakeholders, setting the ethical and moral compass by which we operate. Integrity inspires our people to do what we say we are going to do and to be accountable for the impact of our activities on the community and environment.

The Value of empowerment encourages our employees to do their best and to find innovative solutions to business and societal challenges. By empowering our communities through training, development, employment and business opportunities, we can assist them to thrive and prosper.

Our Board approved Code of Conduct and Integrity establishes the essential standards of personal and corporate conduct of our employees, suppliers, contractors and all those with whom we do business. This strong base supports our commitments and principles which leads to the development and implementation of policies,

opportunities and objectives. These inform specific targets, processes and plans set by our business units.

Compliance with all relevant legislation and obligations including those that govern health, safety and environment is the absolute minimum standard at which we operate.

Our Board is responsible for the oversight of all sustainability issues, receiving regular updates through the Audit and Risk Management Committee (ARMC). At the operational level, sustainability is managed by our Chief Executive Officer with support from the Core Leadership Team

and the Director Sustainability and Corporate Affairs.

Targets

Opportunities and objectives

Fortescue's policies

Voluntary commitments and principles

Code of Conduct

and Integrity

Vision and Values

United Nations Sustainable Development Goals

The United Nations Sustainable Development Goals (SDGs) adopted in 2015, set the 2030 global agenda for sustainable development. The SDGs are a call for global action by national governments to end poverty, protect the planet and to ensure all people are able to enjoy peace and prosperity.

We have aligned Fortescue's approach to sustainability with the SDGs and will continue to work with our host governments as they strive to meet these goals.

The table on pages 27 to 29 summarises how our sustainability targets are contributing towards the achievement of the SDGs. Eight of the SDGs are prioritised by Fortescue.

Our priority SDGs

Our approach to sustainability

Material issues

This report discusses the issues that may impact Fortescue's ability to meet its sustainability commitments and targets.

Material issues are those that may have a significant bearing on our ability to achieve our commitments and targets. These issues are

identified through an annual assessment process that considers risks and opportunities, as well

as internal and external stakeholder views.

The assessment involves a cycle of research, identification, prioritisation, validation and review.

During FY20, our materiality assessment considered the following:

•	Our sustainability initiatives and
	targets
•	Corporate risk assessments
•	Company policies, standards and
	guidelines
•	Results of internal and external
	engagement with stakeholders
•	Media and investor interest and
	feedback

ReviewResearch

Validation2 Identification

Prioritisation

•	Material issues identified by
	peers, sustainability leaders and
	materiality analysis
•	Benchmarking and environmental,
	social and governance
	assessments.

Priorities were informed by internal and external engagement which included workshops with our employees and a broad range of external stakeholders. Materiality was validated by subject leaders and the Executive team, with 11 issues determined to be material.

Material issues are incorporated under our three core sustainability pillars.

Setting high	Safeguarding	Creating positive
standards	the environment	social change

Employee health and safety
Economic contribution
Workforce diversity
Protecting Aboriginal heritage
Ethical business conduct

• Climate change action and	•	Creating employment and
	disclosure		business opportunities for
•	Protecting biodiversity and	•	Aboriginal people
	water resources	Building sustainable communities
•	Tailings management	•	Human rights

26 Fortescue Metals Group Ltd Sustainability Report FY20

Our material issues, related targets and links to SDGs

Target	Result	Location	SDGs

Operating Overview review financial and

Employee health, safety and wellbeing

Workforce diversity

Annually, achieve zero fatalities	Zero	Page
at Fortescue's operations	Workplace fatalities	41
By 2020, reduce injuries to lowest	2.4	Page
TRIFR and severity quartile of
41
resources industry	TRIFR

Annually achieve top quartile	96%	Page

Safety Excellence and Culture	survey participation	45
Survey results
rate
Annual decrease in positive	0.5%	Page
alcohol and illicit drug test results	positive alcohol and	47
	illicit drug test results
By 2020, achieve a female	19%	Pages

employment rate of 25%	female employment	50-55
	25%
By 2020, achieve an employment	female employment in
manager and above roles	Pages
rate of 30% females in manager
26%	50-55
and above roles

	female employment in
	senior leadership roles
Annually, support community led	Programs supported	Page
include Port Hedland
programs empowering women
and Roebourne	100
and ending discrimination
Women's Refuge

approach Our sustainability

Governance Corporate

with Engaging stakeholders

Setting standards

Protecting	Annually, ensure Fortescue has	Zero	Pages
Aboriginal	no impact on Aboriginal heritage	reportable
without consultation with	57-59
heritage	heritage
Aboriginal people
	incidents
Ethical	Annually, ensure ethical conduct
conduct and	is maintained by targeting	Targeted training with a	Pages
anti-bribery	leadership programs, training,	focus on leaders. Auditing
60-61
and	performance assessments and	to ensure ethical conduct

corruption	remuneration
Target met	Target in progress	Target not met

high

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 27

Our approach to sustainability

Our material issues, related targets and links to SDGs continued

Target	Result	Location	SDGs

Achieve a net positive impact on	Ongoing program	Pages
biodiversity	71-73

Protecting biodiversity and water resources


Annually, achieve zero significant	Zero	Pages
environmental incidents	significant environmental	71-73
	incidents
Initiate, host and coordinate
a series of Mine Water
Management Forums about	Mine water management	Pages
the Pilbara Region of WA to	forum postponed due to
74-78
encourage the sharing of	the COVID-19 pandemic

learnings for practitioners and
regulators

Ensure at least 75% of dewatered	99%
water at the Cloudbreak and

Christmas Creek mine sites is	of dewatered water	Pages
used for beneficial purposes	74-78
used for beneficial
or reinjected via the Managed
purposes or reinjected

Aquifer Recharge program

Annually, ensure we adequately	Mine closure plans	Page
comply with all relevant legal
prepared and financial
obligations and commitments	79
provisions made
once mining is complete


By the end of FY20, identify a	Liaising with multiple	Pages
sustainable disposal method for
vendors to implement a
off-the-road tyres and conveyor	83-84
disposal method
belt


By the end of FY20, investigate	Investigations underway	Pages
composting opportunities for
83-84
food related mine wastes

Building	Annually, achieve at least 5% of
sustainable	actual spend with local Pilbara
communities	suppliers

6%	Page
of actual spend with	96
local Pilbara suppliers

Note: Performance against Climate Change action and disclosure is detailed in our FY20 Climate Change Report, which is available on our website at www.fmgl.com.au

28 Fortescue Metals Group Ltd Sustainability Report FY20

Our material issues, related targets and links to SDGs continued

		Target	Result	Location	SDGs

		By 2021, achieve a spend of	6%
		10% of total procurement with
		Aboriginal businesses, with	Pages
		50% of the number of contracts	spend of total	86-89
		procurement with
		awarded to businesses with more	Aboriginal businesses
		than 50% Aboriginal ownership

		By 2020, achieve an employment	10%	Pages
		rate of 20% for Aboriginal people
		90-92
		across Fortescue	employment rate

Creating
	By 2020, achieve an employment	4%
opportunities	Pages
for	rate of 10% for Aboriginal people
in leadership roles	of leadership roles held by	90-92
Aboriginal	Aboriginal people
people
	By 2022, achieve an employment	23%	Pages

		rate of 20% for Aboriginal people	of Aboriginal employees	90-92
		in skilled trades	hold skilled trade
			positions
		Annual involvement in the policy	Ongoing contribution to	Page
		policy debate including
		debate to address Aboriginal
		Business Council of	92
		disparity
		Australia initiatives


		Annually, deliver at least two	Programs supported	Page
		major community projects with	include Big hART
		92
		Aboriginal stakeholder partners	and Jawun


Human	Active engagement on human	Ongoing active	Pages
engagement including
Rights	rights issues in business	on modern slavery in	104-105
			the supply chain.

Target met	Target in progress	Target not met

review financial and	Operating Overview
sustainability	approach Our
	to
	Governance Corporate
stakeholders	with Engaging

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 29

Corporate Governance

Overview of Corporate Governance

Operating Overview review financial and

Good corporate governance is critical to the long-term, sustainable success of Fortescue. Good governance

is the collective responsibility of the Board of Directors (the Board) and all levels of management.

STAKEHOLDERS

GOVERNMENT	BUSINESS	SHAREHOLDERS	EMPLOYEES	COMMUNITY
AND	PARTNERS AND
REGULATORS	INVESTORS

BOARD

MANAGEMENT RESPONSIBILITY

Audit and Risk	Remuneration and	Finance	Nomination
Management
People Committee	Committee		Committee
Committee
BUSINESS PROCESS

	DELEGATION OF AUTHORITY	ASSURANCE
AND
PROCEDURES	CHIEF EXECUTIVE OFFICER	INDEPENDENT
POLICIES	CORE LEADERSHIP TEAM	ACTIVITY
EXECUTIVE AND LINE MANAGEMENT

INTEGRATED RISK MANAGEMENT

CORPORATE CULTURE AND VALUES

approach Our sustainability

Governance Corporate

with Engaging stakeholders

Fortescue seeks to adopt leading practice, contemporary governance standards and apply these in a manner consistent with our culture and Values.

Fortescue supports the intent of the 4th Edition of the Australian Securities Exchange (ASX) Corporate Governance Council's Corporate Governance Principles and Recommendations (Principles and Recommendations). Unless otherwise disclosed, Fortescue has reported against the revised requirements of the Principles and Recommendations.

Our cornerstone principles of corporate governance are:

Transparency

Being clear and unambiguous about our structure, operations and performance, both externally and internally, and maintaining a genuine dialogue with, and providing insight to, stakeholders and the market generally.

Integrity

Developing and maintaining a corporate culture committed to ethical behaviour and compliance with the law.

Empowerment

Ensuring everyone at Fortescue is empowered to make decisions that support our objectives and are in the best interests of stakeholders. Management and employees are encouraged to be innovative and strategic in making decisions that align with our risk appetite and are undertaken in a manner consistent with corporate expectations and standards.

Corporate accountability

Ensuring that there is clarity of decision making, with processes in place to authorise the right people to make effective and efficient decisions and appropriate consequences delivered when these processes are not followed.

Stewardship

Developing and maintaining a company wide recognition that Fortescue

is managed for the benefit of its shareholders, taking into account the interests of other stakeholders.

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 31

Fortescue is committed to building and maintaining constructive relationships with stakeholders

Engaging with stakeholders

Operating Overview review financial and

Our engagement is underpinned by the Value of integrity and our Stakeholder Engagement Framework which ensures regular, open, transparent and inclusive communication.

We engage with a large number of stakeholders, including investors, regulators, community members, customers and industry peers and we work to ensure regular, meaningful engagement that builds trust and respect.

Stakeholders are identified according to their level of interest, potential impacts and opportunities, and we prioritise engaging with those who may be directly impacted by our activities.

We work to resolve grievances in a transparent and accountable manner and implement feedback, monitoring and evaluation processes to ensure we can continuously improve.

This report provides a key mechanism for disclosing our sustainability

commitments and performance. This is supported by communication throughout the year via media statements, company publications, our Annual General Meeting, our website and engagement with specific stakeholders. The form and frequency of engagement is dependent on the stakeholder and the issues relevant to them. A summary of our key stakeholders, their interests and main methods of engagement is detailed on the following pages.

approach Our sustainability

Corporate

Our key stakeholders

Employees

Key interests	Engagement/response

Governance

withEngaging stakeholders

Ensuring a safe workplace
Building a strong and unique culture
Fostering a rewarding workplace through career development, promotional opportunities and recognition. This includes True Colours and Northern Spirits awards and various leadership development programs
Equal opportunity, inclusion and diversity
Strong employment conditions and flexible working arrangements
Good corporate governance and ethical business practices

Fostering a supportive and inclusive culture which encourages participation
Regular communication and essential guidance provided during the COVID-19 pandemic
Regular, open engagement including whole of company weekly face to face meetings, Values Forums, Senior Leader Forums and electronic communication
Regular review and revision of policies and standards
Providing opportunities for feedback, including our annual Safety Excellence and Culture Survey
Training and professional development
Performance feedback (Success Factors) and key performance indicators (KPIs)
Complaints and grievance mechanisms
Collective bargaining and contract negotiations

high Setting standards

Safeguarding environment

Customers

Key interests	Engagement/response

Creating the social

Safe, reliable and consistent supply and delivery of products
Economic activity through sustainable business development
Transparent communication through procurement
Ethical and responsible sourcing
Maintenance of strong technical and commercial relationships through timely, open and honest communication

Regular engagement including face to face and electronic communication
In-countrypresence with offices in Shanghai and Singapore
Quality control of product
Highly skilled and knowledgeable Sales and Marketing team
Contract and agreement negotiations
Opened our new office in Shanghai, China

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Fortescue Metals Group Ltd Sustainability Report FY20 33

Engaging with stakeholders

Shareholders, investors and analysts

Key interests	Engagement/response

Delivery of strong shareholder returns
Management of risk
Implementation of a robust capital allocation framework
Maintain a sound financial position
Strong governance and transparent communication

Annual reports, company publications and releases
Company website with shareholder information and Investor Relations contact details
Regular briefings including quarterly, half year and full year results
Annual General Meeting, where shareholders have opportunity to engage with the Board
Regular one on one group meetings with institutional investors and advisors
Participation in various Environment, Social and Governance (ESG) assessments including the 2020 SAM Corporate Sustainability Assessment (CSA)
Engagement of Proxy Advisors

Native Title Partners and Traditional Custodians

Key interests

Engagement/response

Native Title rights and interests
Compliance with Land Access Agreements (LAAs) and Indigenous Land Use Agreements (ILUAs)
Cultural awareness and understanding
Training, employment and business opportunities
Potential environmental and social impacts associated with our operations

Dedicated Aboriginal heritage, Native Title and Aboriginal development teams
Personal communication and regular consultation with Native Title Groups and prescribed working group committees
Support for Aboriginal heritage protection and promotion activities
Employment and training opportunities through Fortescue's VTEC and Trade Up programs
Targeted and tailored business development meetings
Development and implementation of multiple programs for professional development
Dedicated community office and community team in Port Hedland
Fortescue hosted business and employment exhibitions and events
Procurement targets through Billion Opportunities program
Cultural awareness training of employees
Promotion of Fortescue as an employer of choice, including through the use of our mobile recruitment trailer
Practical solutions to support Aboriginal and local businesses
Provided specific additional support during the COVID-19 pandemic

34 Fortescue Metals Group Ltd Sustainability Report FY20

Local communities

Key interests	Engagement/response

Operating Overview review financial and

Sustainable growth and development opportunities
Employment and business opportunities
Potential environmental, social and economic impacts associated with Fortescue's operations
Community investment and partnerships
Education initiatives

Community investment through our biannual Community Grants Program
Additional support provided during the COVID-19 pandemic
Development of partnerships to address Aboriginal disadvantage, including Big hART and Jawun programs
Partnerships which deliver strategic and meaningful outcomes
Partnerships and investment in youth education initiatives
Implementation of our Stakeholder Engagement Framework

approach Our sustainability

Corporate

Suppliers and contractors

Key interests

Engagement/response

Governance

Economic opportunity through sustainable business development
Working collaboratively to achieve mutually beneficial outcomes
Transparent communication through procurement processes
Financial and operating performance
Ethical and responsible sourcing

Inclusive engagement and consultation
Contract negotiations
Self-assessmentquestionnaires and audits
Continued growth of Billion Opportunities program
Local content procurement targets and strategy
Early and frequent engagement with key contractors and suppliers for major projects
Practical solutions to support Aboriginal and local businesses such as 14-day payment terms and ANZ leasing facility
Regular communication and essential guidance provided during the COVID-19 pandemic
Flexible payment terms during the COVID-19 pandemic

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Government and regulators

Key interests	Engagement/response

the Safeguarding environment

Contribution to national and local economy through job creation, economic activity and local procurement
Management of social and environmental impacts
Compliance with all relevant laws and obligations
Climate change disclosure and reduction in emissions
Legislative and regulatory policy frameworks
Tax transparency and royalty payments
Land access and approvals

Regular, ongoing engagement with government and regulators at federal, state and local levels
Participation in consultation groups
Collaboration and partnerships through conservation and research programs
Active participation in the Port Hedland Industry Council
Detailed annual reporting
Signatory to the Tax Transparency Code of Australia 2016
Regular communication during the COVID-19 pandemic

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Fortescue Metals Group Ltd Sustainability Report FY20 35

Engaging with stakeholders

Non-government organisations

Key interests	Engagement/response

Management of potential social and environmental impacts
Environmental performance and compliance
Community engagement
Human rights performance

Inclusive engagement and consultation
Involvement in UNGC and other industry forums
Development of corporate policies
Collaboration and partnerships
Reporting, ASX announcements and media releases

Pastoralists

Key interests	Engagement/response

• Protection of productivity levels	•	Dedicated pastoral access team
• Preservation of groundwater reserves	•	Formal agreements
• Protection of grazing areas	• Ongoing, informal and formal consultation and meetings
• Preservation of surface water flows		with individual pastoralists
	•	Minimisation and offsetting of impacts on pastoral
		operations

Educational institutions

Key interests

Engagement/response

Providing access to career pathways and opportunities
Supporting and championing Aboriginal students
Development of partnerships and relationships

Hosting of business and employment exhibitions and events to position us as an employer of choice and encourage diversity and inclusion
Development and implementation of multiple programs including high school scholarships and work based traineeships, Trade Up and University Graduate and Undergraduate Program
Work experience opportunities through our Vacation Student Program, Undergraduate and Graduate programs
Site visits and work placement opportunities
Engagement with universities across Australia to encourage graduates
China-Australiauniversity partnership
Partnership with Role Models and Leaders Australia through Up4lt and Girls Academy programs

36 Fortescue Metals Group Ltd Sustainability Report FY20

CASE STUDY

China-Australia university tour increases collaboration and innovation

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During FY20, we welcomed a group of postgraduate university students from Western Australian and Chinese universities to our operations as part of our annual China-Australia university tour.

The successful initiative, now in its third year, brought together students from the University of Western Australia (UWA), Curtin University's WA School of Mines, Minerals and Chemical Engineering, Lingnan (University) College of Sun Yat-sen University, and Central South University in China.

Accompanied by academic representatives, the tour in July 2019 showcased our world class Cloudbreak mine site and Port and Rail operations, with the program tailored to the group's

area of study and experience. The students also visited Fortescue's Vocational Training and Employment Centre (VTEC) in Karratha to gain an insight into our commitment to provide training and employment opportunities for Aboriginal people.

CEO, Elizabeth Gaines said, "We are a top 100 graduate employer in Australia and the next generation of mining professionals have an important role to play internationally. The annual tour aims to increase cooperation and innovation across the mining and resources industry and build on our longstanding relationship with stakeholders in China.

"The China-Australia university tour is an excellent example of our multifaceted approach to engagement. We strongly believe

that by continuing to build connections between Australia and China, we can deepen the relationship between our two countries."

UWA Associate Director of Industry Engagement, Paul Collings said, "The program provided an excellent opportunity for young people to bring ideas from their specialised fields, and expand their knowledge

at Fortescue. The initiative will further enrich cultural linkages between China and Western Australia and we look forward to seeing our students benefit from industry experience through this program."

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the Safeguarding environment

Benchmarking

We participate in benchmarking assessments including the SAM Corporate Sustainability Assessment (formerly Dow Jones Sustainability Index). The assessments are

an important tool to track our performance against stakeholder expectations and peer performance to ensure continual improvement.

Our commitment to external benchmarking initiatives and voluntary standards includes:

Bloomberg Gender-Equality Index
SAM Corporate Sustainability Assessment
International Council on Mining and Metals (ICMM) Sustainable Development Principles
ISO Standards:

14001: Environmental Management
3100: Risk Management
45001: Occupational Health and Safety

• Sustainable Development Goals

Task Force on Climate-related Financial Disclosures (TCFD)
Tax Transparency Code of Australia 2016
UN Guiding Principles on Business and Human Rights
Workplace Gender Equality Agency (WGEA).

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Fortescue Metals Group Ltd Sustainability Report FY20 37

Engaging with stakeholders

Memberships and commitments

Participation in industry associations provides valuable access to information and enables a coordinated industry approach to develop effective policy frameworks.

This participation also facilitates the sharing of best practice and provides access to information and insights on material issues.

We consider our memberships annually to ensure they continue to be beneficial and align with our Values. During FY20, we paid A$859,000 in membership fees for the following industry groups and associations:

Association of Mining and Exploration Companies (AMEC)
Australia-ChinaBusiness Council
Australian Resources and Energy Group (AMMA)
Australian Institute of Management (AIM)
Business Council of Australia
Global Reporting Initiative
Chamber of Minerals and Energy
WA
Chamber of Commerce and Industry of Western Australia (CME)
Committee for Economic Development Australia
Committee for Perth
Corporate Tax Association
DomGas Alliance
Green Ammonia Consortium
Australian Hydrogen Council
Ammonia Energy Association
Port Hedland Industries Council
Supply Nation - founding member
NSW Minerals Council
South Australian Chamber of Mines and Energy
United Nations Global Compact
United Nations Global Compact Network Australia.

Awards

Winners

Chamber of Minerals and Energy (WA) Women in Resources Awards
- Women in Resources Champion (CEO, Elizabeth Gaines)
- People's Choice Award (Superintendent Fixed Plant Planning, Briohny Evans)
AIM WA Pinnacle Awards
- Workplace Diversity Excellence Award
Australian Resources and Energy Group (AMMA)
- Diversity and Inclusion Award (VTEC)
- Workforce and Workplace Innovation Award (Rapid Trades Upskilling Program)
Chief Executive Women
- Executive Development Program Scholarship (General Manager, Ecuador and Colombia, Alexa Morcombe)

Finalists

Fortune Magazine
- Rank 2 - Businessperson of the Year 2019 List (CEO, Elizabeth Gaines)
Chamber of Minerals and Energy (WA) Women in Resources Award
- Outstanding Operator/ Technician/Trade Women (Superintendent Fixed Plant Planning, Briohny Evans).

CASE STUDY

Our sustainability commitment

as a world leader recognised

Fortescue is proud to be rated as a world leader in corporate sustainability in the annual assessment for the 2019 Dow Jones Sustainability World Index. The index has since been renamed SAM Corporate Sustainability Assessment.

Launched in 1999, the index is regarded as the global benchmark for sustainability and ranks the leading listed sustainability-driven companies based on environmental, social and governance factors.

Fortescue is one of only two Australian companies to be added to the index in 2019. CEO, Elizabeth Gaines noted that the index rated our performance as particularly strong in the areas of Occupational Health and Safety, Business Conduct, Social Impacts on Communities, Human Rights, Corporate Citizenship and Philanthropy and Water Related Risks.

Ms Gaines said it was an honour to see our economic, environmental and social performance recognised on the global stage. "This recognition reflects our commitment to hold ourselves to the highest standard and our focus on ensuring sustainability is integrated into all aspects of our business."

"The health, safety and wellbeing of our Fortescue family is our number one priority and we remain focused on achieving our goal of becoming global leaders in safety," Ms Gaines said.

38 Fortescue Metals Group Ltd Sustainability Report FY20

Setting high standards

Safety is both a Fortescue Value and our number one priority

Setting high standards

Employee health, safety and wellbeing

OBJECTIVETARGET

To be global leaders in safety across all operations.

Annually, achieve zero fatalities at Fortescue's operations
Reduce Total Recordable Injury Frequency Rate (TRIFR) year on year to the lowest quartile of the global resources industry.



2.4
		3.2		67
	Total Recordable Injury		Significant Incident		Injury Severity Rate
	Frequency Rate		Frequency Rate per
				million hours

A strong focus on improving safety has seen our TRIFR reduce by 44 per cent over the past five years

40 Fortescue Metals Group Ltd Sustainability Report FY20

We recognise that our activities have the potential to expose our employees, contractors and communities to health and safety risks and we work to identify these risks and ensure suitable controls are in place to mitigate them.

Safety is deeply ingrained in our culture and we strive to be a global leader. During FY20, there were no workplace fatalities at any of our sites and no workplace prosecutions in relation to workplace safety breaches. There have been no fatalities on our sites since 2013.

We seek continuous improvement using industry metrics and benchmarking. Our health and safety management system aligns with the International Standard for occupational health and safety, ISO 45001. Our Board has the ultimate responsibility for the management of safety and occupational health, while the CLT has responsibility for ensuring health and safety in daily operations.

Our safety culture is built from the ground up, with all team members required to set and uphold the highest standards. This builds an environment where everyone can feel empowered to pause, reassess the task and implement controls where needed.

To foster this safety culture, we work with industry and regulatory leaders to maintain the highest standards of education, coaching, training, monitoring and reporting.

We manage and mitigate high-risk events through a risk profile reduction program, critical control monitoring and auditing. Critical control auditing is undertaken by our leaders to ensure these controls are in place and are effective.

During FY20, the Significant Incident Frequency Rate (SIFR) per million hours decreased from 3.7 in FY19 to

3.2 in FY20. Our company wide focus on improving safety has seen our Total Recordable Injury Frequency Rate (TRIFR) reduce by 44 per cent over the past five years to 2.4 including a reduction of 14 per cent over the last year.

Efforts to reduce exposures and proactive injury management has seen our injury severity rate per million hours worked reduce by 41 per cent over the last year from 113 in FY19 to 67 in FY20.

Our reporting is aligned with the US Government Occupational Safety and Health Administration (OSHA) guidelines for the recording and reporting of occupational injuries and illnesses. The rates provided include all employees and contractors working across Fortescue sites and are based on one million hours. The severity rates include days lost and days restricted from work and are also based on one million hours.

Total Recordable Injury Frequency Rate

FY19FY20		2.8		14%
		2.4		IMPROVED
FY18


	3.7

FY17

	2.9


	Significant Incident
	Frequency Rate
	per million hours
FY19FY20
	3.7		14%
		3.2		IMPROVED
FY18

	3.3

		Injury Severity Rate
FY19FY20
	113		41%
		67		IMPROVED
FY18

	131

FY17

	94

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Fortescue Metals Group Ltd Sustainability Report FY20 41

Setting high standards

Exposure reduction activities

During FY20, we introduced the Injury Exposure Reduction Activities (ERA) program. The program involves upskilling leaders to understand their injury risk profile and empower their teams to identify, prioritise and implement exposure reduction activities.

The program is focused on identifying and preventing the potential for injuries through a targeted and structured process. Each site developed a prioritised Injury Risk Profile which is grouped according to the risk behaviour and mechanism of injury (example: Line of Fire - getting struck by moving object).

STEP 1

Historical injury analysis

Leaders and employees target their risk profile

At risk behaviour

Line of Fire, Pinch Points

Mechanism of injury

Hit by moving object, trapped between objects

STEP 2

Injury risk profile

Identify tasks

For example, fitters and boilermakers exposed to line of fire and pinch points when moving and maintaining a Ground Engagement Tool

STEP 3

Identify ERAs

Focus on engineering controls

Potential ERAs:

Tooling
Equipment aids
Specific lifting gear

The program, introduced in early 2020, was quickly adopted and implemented across the business. ERAs are shared across sites and with contracting partners to optimise the benefits of the program.

314		10%
Exposure Reduction	Risk reduction
Activities completed	achieved

Artificial Intelligence improves business processes

During FY20, we used Artificial Intelligence (AI) to expand the analysis of health and safety data in the applications detailed below.

Safety Excellence and Culture Survey - Identification of common commentary and trends

AI is used to read, decipher, and classify text data into common clusters. This enables the business to identify trends and develop actions to improve safety and culture outcomes.

Identify potential repeat Significant Incidents

Identifying repeat Significant Incidents (SI) relies on either people's memory or manual processes involving reading of thousands of incident descriptions. AI uses algorithms to identify SI repeats based on a combination of validated parameters. Identifying SI repeats helps to understand the effectiveness of previous preventive controls.

Identifying locations with

high probability of a Significant Incident

Using lead indicators and algorithms, we are able to identify locations with a high potential of a SI. This enables leaders to proactively target safety efforts.

42 Fortescue Metals Group Ltd Sustainability Report FY20

CASE STUDY

Refresh of our Life Saving Choices

This year, following an analysis of industry fatalities and major hazard events, we refreshed our Life Saving Choices program.

Life Saving Choices aims to mitigate risk and prevent fatalities across all of our sites and applies to employees, contractors and visitors. The program looks beyond the physical controls to prevent injuries and highlights the safe choices we

all can make to keep ourselves and workmates free from harm.

The refreshed program includes additional site-specific Life Saving Choices which are tailored to an operation.

The Life Saving Choices for all sites are:

Using fall injury protection when working at heights
Always work outside the footprint of suspended loads
Verify isolations before work
Confirm stored energy has been controlled
Wearing seat belts and following speed limits
Stopping at stop signs and rail crossings
Securing tools and barricading work areas to prevent dropped objects

Using remote communication and tracking devices when travelling remotely.

Site specific Life Saving Choices include:

Maintaining a three metre exclusion zone from rail track for workers who do not hold a current Rail Safe Working Level 1 authority
Obtaining authorisation to enter explosives and exclusion zones for mine sites, quarries and construction sites that use explosives
Inflating tyres with an approved tyre safety device for tyre fitters, remote workers and people changing tyres across all sites
Wearing a Personal Flotation Device (PFD) when working above water. The PFD is required at our port facilities and tug and vessel operations.

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2.0m

EXPLOSIVE

EXCLUSION

ZONE

3.0m

km/H

CASE STUDY

Our response to the COVID-19 pandemic

During the COVID-19 pandemic, our primary focus was to provide and maintain a safe and healthy work environment for the Fortescue family.

Commencing in January 2020, we carefully monitored the virus' impact and guidelines introduced by international, federal and state governments. We maintained regular communications with our key internal and external stakeholders to ensure controls were followed and travel guidelines understood.

The following key measures were introduced across our operational sites and offices:

Implementation of a COVID-19 management plan, providing a framework to ensure processes are identified and in place to minimise the spread of COVID-19
Assisting team members in higher risk health categories to isolate or work from home
Temporary roster changes for Fly- in Fly-out (FIFO) team members to reduce travel exposures by 40 per cent
Temperature screening at all sites and airports
Voluntary rapid testing
Participation in the FIFO DETECT program with Curtin University, which involved PCR tests for our FIFO workforce

Social distancing protocols at all sites and offices
Changes to site food services to minimise exposures
Additional cleaning services across all our sites, villages and offices
Regular communication with employees, contractors and key internal and external stakeholders, including the implementation of a dedicated COVID-19 engagement plan.

During the pandemic, there was further focus on the mental health and wellbeing of our team members. We reinforced the support available through our Chaplains and our Employee Assistance Program. The impact of the COVID-19 pandemic on our employees and their families continues to be monitored.

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Fortescue Metals Group Ltd Sustainability Report FY20 43

Setting high standards

CASE STUDY

Bushfire preparedness

During FY20, we implemented a bushfire risk management program to protect our people and assets and to minimise the potential disruption of bushfires.

To further understand the bushfire risk, the Geospatial Services and Health and Safety teams developed a remote sensing tool to identify historical fire scars across the Pilbara region.

Remote sensing utilises multi-spectral satellite data along with complex computer algorithms to identify vegetation that has previously been burnt creating 'fire scar' mapping (pictured above).

The fire scar data is used to determine the age of the regrown vegetation referred to as the fuel age. Fuel age combined with vegetation type, density and terrain are used to determine the potential severity of a bushfire. This data is used to identify areas to be subjected to low intensity prescribed burning to reduce the combustible fuel loads and create varied fuel ages across the landscape.

Understanding the fire risks surrounding Fortescue's operations assists Emergency Response teams containing outbreaks of wildfires during the high-risk summer fire season.

Pictured below is an example of prescribed burning undertaken near the accomodation village at our Christmas Creek mine in 2020.

44 Fortescue Metals Group Ltd Sustainability Report FY20

Safety culture

OBJECTIVE

To ensure a leading safetyObjectiveculture and an organisation that actively cares for employees and contractors.

TARGET

Annually, achieve top quartile Safety Excellence and Culture Survey results.

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Each year, we conduct a Safety Excellence and Culture Survey of our employees and contractors. The survey is completed between May and June and is a valuable tool to measure engagement across our business.

During FY20, a refreshed Safety Excellence and Culture Survey was launched. The Survey had

fewer, more focused questions and allowed for expanded comments and suggestions. The comprehensive feedback supported the development of targeted action plans.

Enhanced analytics guided our response to the survey results and ensured continual improvement.

The survey was completed by 11,690 employees and contractors, representing 96 per cent of our workforce. Feedback included over 31,200 comments and suggestions. The Net Promoter Score (NPS), which indicates whether an employee would recommend Fortescue as a place to work, improved from +24 in 2019 to +36 in 2020.

with

high Setting standards

	100						Top Quartile
	90												80
	80

	70
Percentile	60
50
40

	30
	20
	10
	0												AVG
	MV	ML	MS	LV	LL	LS	TV	TL	TS	SV	SL	SS

		Management		Leader		Team		Self

Valuing	MV	Management value people	LV	My leader values people	TV My team value each other	SV I am proud of Fortescue

Leading	ML	Management are credible	LL	My leader looks out for me	TL	My team support each other	SL	I go above to help others

Safe	MS	Management value safety	LS My leader supports safety	TS	We look out for our mates	SS	I take control

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Fortescue Metals Group Ltd Sustainability Report FY20 45

Setting high standards

Wellbeing

We believe in promoting a healthy and balanced lifestyle for employees and contractors, recognising the importance of both mental and physical health across our workforce and in the wider community.

Our Mental Health and Wellbeing Blueprint outlines our approach to supporting our workforce. All operational sites have gyms, pools and other recreational facilities, as well as a medical centre with onsite medical team members.

Reliable internet and communication services are offered to ensure everyone working on our sites can easily communicate with family and friends. We also provide mental health awareness training across all our operations.

The introduction of the Health inSite program in 2018 was a significant step forward in supporting the wellbeing of our workforce. Health inSite is an online health and wellbeing resource that shares tailored information and advice, currently used by 29 per cent

of employees.

During FY20, we launched the following additional wellbeing initiatives:

General awareness training in psychosocial wellness and mental health, run by Mates in Construction, a not-for-profit

company with a focus on suicide prevention in the construction industry

Wake Up Call, an individual targeted intervention health plan that is provided by the medical teams across all our operational sites
Online health and wellbeing program for employees to access while isolating at home during the COVID-19 pandemic.

Our Chaplaincy team, a dedicated pastoral care service, offers support to all employees, contractors and their families with chaplains available at all our sites. Additionally, our Employee Assistance Program (EAP) offers 24/7 support via professional counselling services to employees, contractors and their families.

Fatigue management

Fatigue management is critical to ensuring a safe and healthy workforce. Throughout FY20, key fatigue management initiatives implemented included:

Use of FAID - A roster analysis tool that helps quantify roster fatigue risks
SmartCap trial at Cloudbreak mine site - A system that monitors brain activity and provides operators with real time feedback on their level of fatigue

Onsite reporting tool by Duration - A tool that allows the identification of personnel working additional hours
Edith Cowan University and Solomon Research Partnership

- Assessing the effectiveness of sleep education versus wrist activity monitors
Sleep Apnea onsite screening program - To assist workers with improving sleep quality and reducing the risk of obstructive sleep apnea.

The SmartCap trial ran from November 2019 to February 2020. The main aim of the trial was to detect fatigue in operators early, improve operator self-management of fatigue and to reduce fatigue related incidents. The SmartCap system was trialled in 33 vehicles and collected 3,164 hours of data. At the end of the trial there was a

58 per cent reduction in SmartCap alarm rates in comparison to the first month of the trial and zero fatigue related incidents.

The success of the SmartCap trial has seen the system being fitted to more vehicles in the Cloudbreak mining fleet and will be expanded to other sites in FY21.

46 Fortescue Metals Group Ltd Sustainability Report FY20

Alcohol and
other drugs

OBJECTIVE
To address the prevention
Objective
of substance abuse,
including the harmful use
of alcohol and illicit drugs.
TARGET
Annual decrease in
positive alcohol and
illicit drug tests.


We have a zero	32,191	0.5%
drug use in the
tolerance of
alcohol and illicit
workplace	Number of drug	Tests returning a

	tests conducted	positive result
		for alcohol
		and illicit drugs

In FY20, we conducted 32,191	the Fortescue Centre in Perth,	of initiatives including online
drug tests across our sites through	in addition to pre-employment	awareness and education training,
random, blanket or 'for cause'	testing, to ensure team members	the 'Speak Up' program and
programs.	joining us are safe to work on site.	support through our leadership
Alcohol and drug testing was also	To prevent and manage substance	teams, our Chaplains and the EAP.

undertaken during inductions at	abuse we implement a range

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CASE STUDY

Mental health roadshow promotes healthy conversations

During FY20, we held our annual mental health roadshow in recognition of WA Mental Health Week.

The program was supported by our Chaplains and involved employees discussing their experiences of mental health in the FIFO industry.

Team members discussed their own mental health challenges and the ways in which they were supported by friends, families and our community. They also spoke of their own battles with anxiety and depression, about losing family members, friends and colleagues to suicide and about the ways in which they were helped through these difficult times.

The Mates in Construction team also joined the roadshow. The Mates in Construction program aims to reduce the high level of suicide among Australian construction workers and improve their mental health and wellbeing.

The roadshow received overwhelmingly positive feedback and inspired team members to promote healthy conversations within their teams.

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Setting high standards

Our Fortescue family

It is only with the best people that we will be able to meet and exceed our targets and stakeholder expectations.

Fortescue is committed to providing a safe and inclusive workplace that attracts, develops and retains motivated and high performing people.

As at 30 June 2020, we had 8,508 employees. Of these,

414 were permanent part-time employees and 1,553 people worked under labour hire contracts. Forty-seven per cent of our employees are covered by enterprise agreements and the annualised voluntary turnover in FY20 was 8 per cent.

We respect freedom of association and the right to a fair wage and we ensure all employees are treated fairly and without discrimination including on the basis of age, race, gender, political or religious belief, culture, family commitments, physical or mental ability, marital status or sexual orientation.

Employee engagement

We are renowned for our unique and differentiated culture and recognise that employee engagement is integral to building and maintaining this culture. Employees are empowered to provide feedback and help shape the way we operate. We encourage and measure engagement with employees through a number of mechanisms including forums, surveys and workshops.

Our Values Forums are an important component of this engagement, allowing the CLT to provide business updates and lead discussions on our Values. During FY20, we held two Values Forums at each of our sites, including an online forum during the COVID-19 pandemic.

We also conducted our annual independent Safety Excellence and Culture Survey of our employees and contractors. The survey is

a valuable tool to engage with employees and contractors. A summary of the survey results are provided on page 45.

Recognising individuals

Northern Spirits, our employee recognition program, celebrates and rewards team members (employees, contractors and labour hire) who strive to build and strengthen our culture.

Northern Spirits originated as a symbol of triumph of spirit over adversity following the tragedy that emerged from Cyclone George in 2007. Since its inception in 2015, 110 employees have been recognised through the program.

Northern Spirits categories

KEEEPING

OURSELVES AND

OUR MATES SAFE

HAVE A CRACK

BUILDING GREAT

TEAM CULTURE

CLOSING THE GAP

ON ABORIGINAL

DEVELOPMENT

INSPIRING FEMALE

EMPLOYEES TO

THRIVE

GOING THE EXTRA

MILE FOR OUR

COMMUNITY

48 Fortescue Metals Group Ltd Sustainability Report FY20

Development opportunities

We have a dedicated Corporate Training and Development team and a strategy which provides employees and contractors with educational and professional development opportunities.

Individual training plans are developed by employees in consultation with their direct leaders as part of the biannual performance review process.

Our leaders are provided with appropriate training to allow them to excel and support their team. In FY20, 230 current and emerging team members completed our Leadership Excellence Pathway Program. Since its inception in 2015, 1,871 leaders have completed the course.

The program comprises four components:

Emerging Leaders Program
Leadership Fundamentals Program
Advanced Leadership Program
Short and targeted Leadership Development Programs on sites.

CASE STUDY

Supporting families during the COVID-19 pandemic

In FY20, we worked closely with our leaders and external providers to implement a COVID-19 Training Support Plan with team members offered access to a number of online development programs, including:

Leadership Fundamentals Program
Iron Ore Projects (IOP) Leadership Program
Leadership Podcast Series
Public Speaking and Virtual Presentation Skills Workshops
One-on-oneLeadership Coaching
Australian Institute of Management (AIM) WA courses.

We also continued our Empower Program which is designed to support high performing team members develop their career pathway. At least 50 per cent of those nominated for participation must be female. We are also working to provide an apprenticeship program aimed at training leading hands and high-performance employees to become supervisors.

Providing effective training

We measure the success and outcomes of our training programs through the following process:

Feedback - Surveys completed following the delivery of training assess whether learning outcomes have been met
Learning - An annual assessment is undertaken to better understand learning objectives and outcomes for employees
Performance monitoring - Reviewing how employees apply their learnings
Results - Measuring the business outcomes by evaluating employee retention, productivity and morale.

The results of these assessments are used to improve and redesign training programs where required.

During FY20, 91 per cent of our employees received training across all sites with an average of 24 hours per employee.

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the Safeguarding environment

The COVID-19 pandemic created a challenging situation for many Fortescue employees and their families. To support our Fortescue family, we implemented a number of initiatives including:

Additional support services for families relocating from interstate including:

- Home office equipment
- Access to business internet services
- Weekly connections for partners and family
Leave allowances paid during extended rosters
Additional and focused Chaplaincy support

Additional IT equipment for site personnel
Healthy lifestyle workshops:
- Mindfulness
- Weekly virtual fitness sessions
Dial an Angel virtual creche for families
Fortnightly virtual social events.

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Setting high standards

Workplace diversity

OBJECTIVE

ObjectiveIncrease the number of female employees and leaders to build a more inclusive culture.

TARGET

By 2020, achieve a female employment rate of 25 per cent
By 2020, achieve a female employment rate of 30 per cent in manager and above roles.

OBJECTIVE

Objective

Support the empowerment of women and end discrimination in local communities.

TARGET

Annually, support community led programs empowering women and ending discrimination.

We are committed	19%	25%
to championing a
workplace that is
diverse and inclusive
	Female	Female employment
	employment rate	rate in manager and
		above roles

50 Fortescue Metals Group Ltd Sustainability Report FY20

Championing diversity

Increasing female and Aboriginal employment rates remains our key priority. Our Diversity Plan outlines our objectives and targets and is informed by consultation sessions and surveys with our employees.

Our female employment rate continued to increase in FY20 with females holding 19 per cent of total positions and 26 per cent of senior leadership roles. At the Fortescue Centre, Perth, 38 per cent of employees are female and women hold 49 per cent of the roles in our newly developed Fortescue Hive operations centre.

While our female employment numbers continue to increase, the target of 25 per cent has not yet been reached and this remains a critical focus for Fortescue as new operations commence.

We have a number of inclusion and diversity initiatives to build talent pools and provide a supportive workplace for all employees, including:

16 weeks paid parental leave for primary carers
Commitment to gender pay equity
Flexible working arrangements
Establishment of our Fortescue Family Room at the Perth Fortescue Centre in August 2017
Introduction of In-home Childcare in Port Hedland in May 2019.

Our flexible work arrangements are utilised by 438 of our male and female employees, down from 463 in FY19. During the COVID-19 pandemic, office based employees utilised

our Temporary Work Management Guidelines including working from home arrangements.

Over 94 per cent of parents returned to work in FY20 following parental leave and 1,256 children accessed the Fortescue Family Room in Perth. There has been growth in In-home Childcare in Port Hedland. We also provide financial support to the YMCA, to enable carers the opportunity to gain qualifications.

Our Board has ultimate responsibility on diversity and inclusion matters through its Remuneration and People Committee.

49%

of roles in the Fortescue Hive are held by women

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CASE STUDY

Partnering with Mentor Walks to inspire future female leaders

with

high Setting standards

This year, we partnered with Mentor Walks to bring its successful mentoring program to Perth, providing West Australian women with the opportunity to connect with some of the State's most influential female leaders.

Launched in 2016, Mentor Walks aims to make mentoring accessible to women across Australia by connecting participants with female leaders through an hour-long 'walk and talk' in cities across Australia. By taking mentoring away from the office, mentees can feel inspired,

gain new ideas and get a different perspective.

The inaugural Perth walk departed from the Fortescue Centre on 12 November 2019 and was attended by CEO, Elizabeth Gaines, Deputy CEO, Julie Shuttleworth, Non-Executive Director, Jennifer Morris, along with our senior female leaders. Mentor Walks Perth Lead and Director Sustainability and Corporate Affairs, Alison Terry said the walk builds on a range of initiatives that Fortescue has already implemented to ensure as many women as possible can

make a strong contribution to the Australian resources sector.

"We are proud to support and encourage our female team members to reach their full potential through leadership development," Ms Terry said.

"Mentor Walks will provide local women with the opportunity to gain insights and discuss challenges with some of the State's most successful women, helping them to take the next step in their career and developing the next generation of female leaders."

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Supporting our female employees

Goal	Target	Progress	SDGs

		•	The number of female employees reached 1,650, an
			increase from 17% in FY17 to 19% in FY20
	Company wide	•	26% of our senior leadership team are female, an
		increase from 20% in FY17
	target:
	• 25% of our management team are female
	By 2020, achieve
	•	The target of 25% participation rate was exceeded in
	female employment
Promote		the following programs:
rate of 25%
	- Empower program
female
employment			- CEO for a Day

- VTEC program

Build talent pools

Recruitment team	• Females made up 22% of job applicants compared
and external		with 20% in FY19
contractors target:	•	25% of female job applicants appointed roles
Achieve 25% female		compared with 24% in FY19
recruitment	•	16% of labour hire appointments were females

Flexible work	•	438 employees accessed flexible work
arrangements		arrangements, of whom 34% were female

	•	Senior leaders promoted our diversity goals and
		performance at various functions and events
		including:
		- International Women's Day
		- Women in Mining WA
		- Empower your Career Summit
Promote Fortescue		- Melbourne Mining Club
• Our Empower your Career Summit promoted
as an employer of
	Fortescue as an employer of choice with an
choice for women		emphasis on female employment opportunities
	•	Internal promotion with a focus on transparency in
		recruitment and promotion opportunities
	•	Highlighting the importance of diversity in the wider
		community through conferences and initiatives such
		as signing the ParityPledge
	•	Partnering with Mentor Walks to provide women
		with the opportunity to connect with female leaders

		Attract parents
		to return to work	• 94% primary carers parental leave retention rate
		following career

		breaks

			• In FY17, Our Trade Up program was opened to
		Encourage and	women. 35 females have joined Trade Up, close to
		25% of overall participants
		support female
		• We encourage female employees to obtain
		employees to
		qualifications and further their career opportunities
		obtain professional
		through our biannual performance review program,
		qualifications
		Success Factors and via our Rookies and Coaches

			mentoring program

52 Fortescue Metals Group Ltd Sustainability Report FY20

Goal	Target	Progress	SDGs

	Celebrate success in	•	In FY20, two Northern Spirits recipients were
	diversity through our		recognised for their role in encouraging female
	recognition programs		employees to thrive

	Encourage all eligible	• The number of both males and females accessing
		primary carer paid parental leave increased from
Create a	employees to access
	previous years
workplace	paid parental leave	•	438 direct employees utilised flexible working
which	and to return to work		arrangements
supports	following parental leave
diversity
Conduct biannual

	contractor gender	•	Two forums were held during the year attended by
	diversity forums to
		17 suppliers. A committee was formed to manage
	share learnings across
		the implementation of actions
	partners and WA

	industry more generally

		• The Fortescue Family Room operates 24 hours a
			day, seven days a week and has cared for 2,883
	Operate our Family		children over 7,725 stays since August 2017. The
		facility was temporarily closed in FY20 due to the
	Room at the Fortescue
		COVID-19 pandemic
	Centre in Perth
	•	Collaborated with Dial an Angel to offer virtual

			creche sessions to support parents working from
Provide			home during the COVID-19 pandemic

In-home Childcare for	•	Our In-home Childcare in Port Hedland continues to
childcare
Port Hedland		be utilised
options

	•	Family and friends hosted at each site during FY20:

	Support employees with		- 45 at Hedland Operations
		- 207 at Cloudbreak
	family responsibilities
	through family site		- 206 at Christmas Creek
	visits and community		- 286 at Solomon Hub
	based family support
	• Some tours were postponed in FY20 due to the

			COVID-19 pandemic

	By 2020, achieve a	• 25% females in manager and above roles in FY20
	female employment rate
	•	26% female employment in senior leadership roles
	of 30% in manager and

above roles	in FY20

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the Safeguarding environment

Promote opportunities for women to move into leadership positions

Identify females with
leadership potential,	•	During FY20, 33 females participated in the
with a focus on
	Empower Program, where at least 50% of the
operational roles,
	participants are women. The program is designed to
through talent reviews
	empower and support high performing employees
and ensure participation
	in developing their career path
in Leadership

Development Programs

	•	One female of a total of three participated in the
		CEO for a Day Program in FY20
Continue the CEO for	•	We continue to encourage and support our
	mentoring program, Rookies and Coaches, which is
a Day initiative and
	available to all employees
mentoring programs
•	During FY20, 20 females participated in Mentor

Walks. The mentoring program aims to connect participants with female leaders

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CASE STUDY

Fortescue recognised for championing diversity

In March, Fortescue was recognised at the 2020 Chamber of Minerals and Energy WA (CME) Women in Resources Awards for championing diversity.

The annual awards celebrate individuals and organisations that help foster the development

of women within the sector through career opportunities and increased participation. CEO, Elizabeth Gaines was named Women in Resources Champion while Superintendent Fixed Plant Planning, Briohny Evans, was recognised by her peers in the People's Choice Award.

Accepting the award, Ms Gaines said a commitment to diversity starts at the top. "Diversity is not just the right thing to do, it's the smart thing to do and our success is proof. I would like to thank our team who work day in, day out to build a safe, supportive workplace that embraces diversity and a world class mining operation."

CASE STUDY

Our diversity celebrated at WA's peak business awards

Our industry-leading diversity initiatives were celebrated at the 2019/20 AIM WA Pinnacle Awards, which acknowledges the best in business leadership across Western Australia.

Fortescue won the Workplace Diversity Excellence Award, in recognition of its approach to fostering a diverse workplace.

CEO, Elizabeth Gaines said, "As a proud West Australian company, it is an honour for us to be acknowledged by the business community for our leadership in workplace diversity.

"We want to ensure as many people as possible have the opportunity to enjoy a career in the mining sector and to experience the difference it can make in their lives and the lives of their families," Ms Gaines said.

Accepting the award on behalf of Fortescue, Director Fortescue People, Linda O'Farrell said our culture

and Values had been key to driving diversity across the business. "Our people are our greatest asset and this award is testament to the hard work and dedication of our entire family continuing to drive our unique culture and build an inclusive and safe workplace," Ms O'Farrell said.

"We are especially proud to be one of Australia's biggest employers of Aboriginal people and through our pioneering training, employment and business development programs are helping to drive generational change and sustainable futures for Aboriginal communities."

We donated the prize of $20,000 worth of training from AIM WA to the Ronald McDonald House Charities Western Australia.

54 Fortescue Metals Group Ltd Sustainability Report FY20

"The best results come from a diverse workforce who are supported and encouraged to reach their

full potential"

CEO, Elizabeth Gaines

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Pay equity

We undertake an annual remuneration benchmarking assessment to ensure that remuneration is comparable with those within the Australian mining industry and that equitable remuneration exists for like-for-like roles, independent of gender, race, age or culture. If necessary, remuneration is adjusted according to the results of this assessment.

Looking forward

To ensure our commitment to diversity is embedded in our culture, the following initiatives have been prioritised for FY21:

Building talent

Continue to build talent pools to meet our ongoing growth requirements by providing training opportunities, graduate programs, work experience, vacation programs and secondments
Continue to promote Fortescue as an employer of choice through targeted programs such as the Empower your Career Summit.

Promote female employment

Increase women in trades and professional roles through our Trade Up and graduate programs
Continue consultation with employees through dedicated sessions, forums and surveys with a focus on engagement and retention strategies for female employment.

Create a workplace that supports diversity

Implement a targeted diversity approach, ensuring diversity and inclusion across all sites
Undertake focused discussions with key suppliers on increasing diversity in their businesses.

Provide childcare options

Continue supporting families through flexible work arrangements and childcare facilities in Perth and Port Hedland and explore possible childcare options for site based employees
Address challenges associated with flexible working and job share arrangements.

Promote opportunities for women to move into leadership positions

Provide career development opportunities for emerging and senior female leaders
Continue the internal promotion of diversity and inclusion with a focus on transparency in recruitment and promotion opportunities
Identify and continue to support women aspiring to be leaders as part of our succession planning.

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CASE STUDY

Empower your Career Summit

In November 2019, together with our contracting partners, Fortescue hosted the Empower your Career Summit, showcasing the types of careers available across the mining industry.

Guests were given the opportunity to speak to company representatives as well as attend sessions hosted by contracting partners, Sodexo, Programmed

and Chandler Macleod. The summit also included a business update from CEO, Elizabeth Gaines, a session on home and work life balance and an overview of our Eliwana and

Iron Bridge projects.

Held at the Fortescue Centre in Perth, the event was open to women looking to find out more about job opportunities within the mining industry, regardless of

whether they're new to the mining industry, looking to return to work after a career break or an industry professional.

Over 420 women attended these events with 24 contracting partners hosting information booths with teams from across Fortescue.

CASE STUDY

Signing the ParityPledge

The best results come from a diverse workforce who are supported and encouraged to reach their full potential.

This year, Fortescue signed the global ParityPledge, in recognition of our commitment to fostering an inclusive and diverse workforce. The ParityPledge is an initiative of Parity.org, a not-for-profit organisation focused on bringing gender equality to the highest levels of business, requiring companies to commit to interviewing at least one qualified female candidate for every executive position.

CEO, Elizabeth Gaines said, "By focussing on supporting leadership development, the retention of female talent and providing more balance and flexibility in the workplace, we want to ensure that as many women as possible have the opportunity to develop and further their careers at Fortescue and across our industry."

The ParityPledge builds on our practical policies that foster a workplace that embraces diversity.

56 Fortescue Metals Group Ltd Sustainability Report FY20

Preserving Aboriginal heritage


		Objective	TARGET
		OBJECTIVE

		Work together with	Annually, ensure Fortescue has
		Aboriginal people to manage	no impact to Aboriginal heritage
		Aboriginal heritage responsibly	without consultation with
		and sustainably.	Aboriginal people.

0	198,798	5,933
Reportable	Hectares of land	Active heritage
heritage incidents	ethnographically	sites managed
	surveyed

Our commitment to preserve and promote Aboriginal history and culture is embedded in our approach to operating sustainably and responsibly

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We work closely with our Native Title Partners (NTPs) and governments to responsibly manage the Aboriginal cultural landscape with our efforts measured against four pillars:

Meaningful consultation with Aboriginal people and their representatives
Implementation of effective systems and processes
Contributions to researching Aboriginal cultural heritage sites
Ongoing education and engagement with our workforce.

These pillars are critical to maintaining compliance with applicable legislation and agreements while ensuring the protection of Aboriginal culture. We conduct heritage surveys early in the planning phase and, wherever possible, protect sites of significance from impact. Open, transparent and inclusive consultation is a critical part of developing new projects.

We work with our stakeholders to sustainably manage Aboriginal heritage and protect 5,933 Aboriginal heritage places across our operations. We achieve this by conducting heritage surveys early in the planning phase, together with 'free, prior and informed' consultation, which enhances our capacity to avoid and preserve Aboriginal heritage places.

During FY20, we undertook multiple heritage surveys in the Pilbara region. These surveys were associated with our Eliwana and Iron Bridge projects. The outcomes of these surveys are shared with stakeholders through various mechanisms including via NTP subcommittee heritage meetings which also provide an opportunity to discuss learnings and improvements.

Native Title Partners

We have a longstanding relationship with our NTPs and have comprehensive agreements in place with seven Native Title Groups in the Pilbara.

We have registered Indigenous Land Use Agreements (ILUAs) with Kariyarra, Palyku and Nyiyaparli Native Title Groups. The ILUAs foster beneficial relationships which in turn deliver greater opportunities for local communities. We have Land Access Agreements (LAAs) with the following Native Title Holders:

Martu Idja Banjima
Eastern Guruma
Puuti Kunti Kurruma and Pinikura.

We also have a Project Area Agreement with the Nyamal People Native Title Holders.

We are committed to working closely with each of our NTPs to convert LAAs into ILUAs.

Yindjibarndi Native Title Group

During FY20, the High Court of Australia refused Fortescue's application for special leave to appeal the 2017 decision of the Full Federal Court to grant exclusive Native Title to the Yindjibarndi People. The relevant area covers parts of our Solomon Hub mining tenure.

The decision of the Full Federal Court has no impact on our current or future operations or the mining tenure at our Solomon Hub and we do not anticipate any material financial impact to the business as a result of the Full Federal Court decision.

We acknowledge the decision of the High Court not to grant special leave to appeal the decision of the Full Federal Court and accept the Yindjibarndi People's non-exclusive Native Title rights and interests over the area. While we have never challenged the Yindjibarndi People's right to Native Title, the decision to appeal the Federal Court's decision was taken to clarify the point of law regarding exclusive possession. This matter has potential implications for a range of industries including mining, agriculture and tourism development proposals.

We remain open to negotiating a Native Title agreement with the whole of the Yindjibarndi community, to ensure they can share in training, jobs, business opportunities

and compensation. Our seven agreements with Native Title Groups provide Native Title royalties as well as heritage management, training, employment and business opportunities. These agreements provide significant economic and social benefits to the relevant communities.

Promoting Aboriginal culture

A critical component of our ongoing commitment to preserving Aboriginal heritage and promoting Aboriginal culture is cross-cultural awareness training.

We continued to deliver cross-cultural awareness training during FY20, with 746 employees and contractors undertaking the mandatory training. Heritage inductions are provided to employees or contractors who may encounter heritage sites through their work. Since inductions commenced in 2006, 9,734 heritage inductions have been delivered across the business.

58 Fortescue Metals Group Ltd Sustainability Report FY20

Preserving cultural heritage

We have a proud history of working with Aboriginal people to manage Aboriginal heritage responsibly and sustainably. We have worked with our Native Title Partners to identify and protect 5,933 significant Aboriginal cultural heritage places across our operations. Our primary objective is to work on a cultural heritage avoidance basis.

Our seven Native Title Land Access Agreements and numerous Aboriginal heritage agreements establish detailed processes for the conduct of Aboriginal cultural heritage surveys, consultation, project planning, impact mitigation and negotiation. During the exploration process and at each of our operational and project sites, we implement a range of measures that preserve and protect significant Aboriginal cultural heritage. Some of these measures include:

Heritage Restriction Zones that prevent access to the most culturally significant areas identified through heritage surveys with Native Title Partners
Land Use Certificate process that prevents and places conditions on ground disturbing activity so that heritage places are protected
Using distinctive pink and black heritage tape to identify boundaries to heritage sites, as well as the creation of buffer zones to ensure mining activity is kept at a safe distance
Sensitive electronic vibration and dust monitoring as well as motion sensing cameras to ensure significant heritage places remain undisturbed
Toolbox and prestart sessions to inform employees of these measures.

CASE STUDY

Cultural mapping builds on longstanding relationships

With the support of Terra Rosa Consulting and Palyku Enterprises, Fortescue's Heritage team facilitated on Country Heritage Consultation with Palyku Traditional Owners in September 2019.

The Senior Cultural Palyku People travelled from Nullagine and beyond to share stories, map cultural places and connect to country.

The cultural mapping provided an opportunity to build on

long standing relationships with the Palyku Traditional Owners and for the senior cultural knowledge holders to share information and insights with other Palyku people. Their connection to country was enlightening and the consultation with these key knowledge holders was invaluable to the Palyku People and Fortescue.

Working together proactively with integrity and openness allowed the Palyku people to map out heritage sites of ethnographic significance and for this boundary to be better understood by Fortescue's Heritage team. This work ensured that the Cloudbreak Mine Planning team was able to design the Abrolhos mining area in a way that ensured the nearby ethnographic place boundary was maintained and its integrity protected.

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Business conduct

OBJECTIVE

ToObjectiveensure our Values reflect ethical conduct and respect and are embedded in the business.

TARGET

Annually, ensure ethical conduct is maintained by a targeted program including leadership development, training, performance assessments and remuneration.

Ethical conduct

We are committed to ensuring integrity and honesty through all our business practices. This commitment is built on our Values, the professionalism of our employees and our responsibility to act with accountability and transparency.

We operate under a Code of Conduct and Integrity (the Code) which reflects our Values and represents our commitment to uphold the highest ethical business practices. The Code provides guidance on the standards of behaviour expected from those who work for us including our directors, employees, contractors, suppliers, business partners, and all those affiliated with our subsidiaries and related companies over which we have control. The document is regularly reviewed to ensure it clearly reflects business and community expectations.

The Code does not stand alone, rather it complements and incorporates key elements of our policies and standards including:

Health and Safety Policy
Procurement Policy
Diversity Policy
Anti-Briberyand Corruption Policy
Gifts and Entertainment Policy
Sanctions Compliance Policy
Whistleblower Hotline Policy
Privacy Policy
Human Rights Policy
Equal Opportunity, Harassment and Bullying Policy
Securities Trading Policy
Continuous Disclosure and Market Communications Policy
Appropriate Use of Technology Policy.

Each employee and contractor must ensure they are familiar with the Code, which is accessible in electronic format on our website and intranet. Training provided across the business reinforces the requirements of the Code. All employees participate in performance assessments biannually where adherence to the Code is assessed and reported. Remuneration is linked to these assessments.

Reporting and investigation

We provide a range of mechanisms to report suspected breaches of the Code. These include:

Encouraging employees to raise issues with their manager or a member of our Fortescue People team via the Speak Up program
Encouraging community members to report via our community or site offices
Providing a Whistleblower Hotline for anyone who wishes to make a reportable conduct disclosure.

Our Whistleblower Hotline provides an independent, confidential and anonymous mechanism for anyone, including employees, contractors and members of the community, to raise concerns regarding potential illegal activity or breaches of the Code. The system can be accessed via an online portal, phone, email or post, and has multilingual capabilities.

60 Fortescue Metals Group Ltd Sustainability Report FY20

Our Whistleblower Hotline Policy is aligned to the Treasury Laws Amendment (Enhancing Whistleblower Protection) Act 2019, and provides protection to disclosers of reportable conduct, including suspected:

Bribery or corruption
Conflict of interest
Fraud or theft
Serious misconduct or dishonesty
Danger to the public or financial system
Improper state of affairs in relation to Fortescue.

During FY20, 34 Whistleblower Hotline disclosures were reported. All disclosures were reviewed by our Corporate Governance and Compliance Manager who either conducted or commissioned an investigation. The majority of issues raised via the Whistleblower Hotline were employee relations matters, including concerns of discrimination, bullying and harassment. A number of these investigations resulted

in corrective actions, including warnings and in some cases, termination.

Bribery and corruption

Bribery and corruption undermines legitimate business activities, distorts competition and has the potential to expose our business and people to significant risks. We practise a zero tolerance approach to all forms of bribery and corruption and are committed to working with local, state and federal governments as well as others to prevent corruption in our society.

As we develop our major projects within Australia, and expand into new jurisdictions, our exposure to bribery and corruption increases. We rely on our Value of integrity and our strong corporate culture to ensure that all business is conducted fairly, openly, honestly and in compliance with all applicable legislation.

Our Anti-Bribery and Corruption Policy and Standard describes the behavioural expectations that ensure strict compliance with all applicable legal regimes. Our Corporate Governance and Compliance Manager oversees compliance with our Anti-Bribery and Corruption Compliance Program which is designed to meet the requirements of the Australian Criminal Code and applicable legislation in the countries in which we operate. The Program includes:

Management commitment to promoting a 'Culture of Compliance' that rewards prudent conduct, and permits escalation of potential issues without fear of reprisal
Bribery and corruption risk assessments that consider the potential fraud, bribery and corruption risks associated with our business, third party partners and geographic locations
Robust internal controls that clearly and effectively identify, investigate, report and mitigate non-compliant activity
Independent testing and auditing of the effectiveness of internal controls
Targeted training of all employees on a periodic basis.

Employees who are found to have breached anti-bribery and corruption laws or our Standard are subject

to disciplinary action which may include termination.

During FY20, our Company Secretariat delivered face to face anti-bribery and corruption training to 226 team members across seven 'high risk' business units: Sales and Marketing, Shipping, Business Development, Exploration, Major Projects, Procurement and International Operations.

The Audit and Risk Management Committee is responsible for overseeing matters related to anti-bribery and corruption including the Whistleblower Hotline reporting and investigation process.

Political donations

We do not make political donations to any non-Australian political party, politician or candidate for public office in any country unless the donation has been approved in advance by the Board. Attendance at political functions is permitted where there is a legitimate business reason. Attendance at these functions must be approved by the Company Secretary and Director of Community, Environment and Government. A record and cost of attendance is maintained.

Cyber security

Cyber security has been identified as a material operational risk to our business and we work to ensure our operations are protected from potential threats. We adopt an enterprise approach to reducing risk and align our priorities to support the maintenance of a strong cyber security culture. Our commitment is supported by a comprehensive Cyber Security Policy, which ensures that:

Appropriate controls are in place to protect information security
Information systems are accessed and modified only by authorised personnel
Users of information systems are accountable for the security of information.

Our Board is responsible for ensuring that internal controls are robust and able to effectively manage cyber security. The Audit and Risk Management Comittee (ARMC) assists the Board in its oversight of the internal control framework, risk management and compliance by obtaining assurance over the effectiveness of our Cyber Security Control framework.

More information on cyber security is available on our website at www.fmgl.com.au

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Total global economic contribution

A$17.2bn

Total global economic contribution

A$1.2bn

Gross salaries, superannuation, incentive payments and training

A$4.4bn

Shareholders and investors including dividends and interest payments

A$7.2bn

All operational payments including payments made to suppliers

A$4.3bn

Taxes, royalties, other government payments and Native Title payments

Our approach to tax

Operating Overview review financial and

We make sustainable investments by using the strength of our business to ensure communities benefit from our growth and development. Payment of tax is an important element of this as the tax we pay contributes to the economic development of the countries in which we operate.

We strive for full and timely compliance with the letter and intent of the prevailing tax laws of all jurisdictions in which we operate. We seek strong, collaborative working relationships with all relevant revenue authorities.

In line with our Board-approved Tax Policy, we work to achieve these commitments by:

Ensuring implementation of our Tax Governance Framework
Complying with all applicable tax laws and regulations of each country in which we operate including reporting and paying all necessary taxes in a timely manner
Managing tax risks through

appropriate mechanisms to assess both short and long-term tax impacts when making major commercial decisions

Developing mutually transparent, cooperative and respectful relationships with tax authorities in the countries in which we operate and communicating with those authorities on tax matters where appropriate
Ensuring public disclosures are transparent, timely, accurate and meet stakeholder expectations
Operating in good faith through appropriate transfer pricing and not undertaking 'profit shifting' activities
Entering into transactions on the basis of commercial merit, not for the purpose of avoiding tax.

A copy of our Tax Policy is available on our website at www.fmgl.com.au

Governance

Our Board is ultimately responsible for ensuring a robust system of internal controls is in place for tax governance purposes. Our Tax Policy and comprehensive Tax Governance Framework are key to governing the management of tax related risks in Australia and in all relevant overseas jurisdictions.

The Board, through the ARMC, receives regular updates from senior management on the operation and effectiveness of our Tax Governance Framework.

approach Our sustainability

Governance Corporate

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Setting standards

TAX GOVERNANCE FRAMEWORK

BOARD OF DIRECTORS

Audit and Risk Management Committee

Chief Executive O‹icer

Chief Financial O‹icer

Fortescue business operations Fortescue tax team

Revenue authorities

Fortescue's tax team is proactively involved in business operations and seeks external tax advice when necessary

Corporate objectives

1 Manage risk	2 Timely and accurate disclosures 3 Preventative and detective controls
			Tax strategy
Transparency	Operates in	Low risk	Compliance	Collaboration
	good faith

VISION AND VALUES

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Our attitude to tax risk

Fortescue accepts a low level of risk in relation to major transactions and tax compliance activities, undertaking to file only verified tax positions. Major transactions are determined based on the value of the transaction and associated tax risk, technical complexity of the transaction and interpretation of the prevailing tax legislation. Where the application of the tax legislation is unclear, we seek external tax advice and consult with the relevant taxation authorities to achieve an appropriate level of certainty. There are also a number of controls, systems and procedures in place to manage our exposure to tax risk.

Tax transparency code

We are committed to transparency across all aspects of our business, including in relation to our tax obligations. By providing our investors and other external stakeholders with relevant tax information, we offer a deeper understanding of our tax profile to the wider community.

Our continuous review of internal tax policies, industry best practice, feedback from key stakeholders and legislative developments further

underpins our commitment to tax transparency.

Fortescue has been a signatory to the Australian Board of Taxation (BoT) voluntary Tax Transparency Code (TTC) since 2017. The TTC sets out several principles and minimum standards to guide additional disclosures of tax information by multinational businesses. The TTC is divided into two parts, with the BoT recommending that Part A and Part B be adopted by large businesses such as Fortescue.

To comply with Part A of the TTC, we have extended the scope of our income tax disclosures contained within our annual financial report since FY17. Part B disclosures are included in our sustainability reporting. This details our approach to tax strategy and governance, as well as providing additional information on overseas operations and international related party transactions.

Total tax contributions

We pay taxes according to the prevailing laws in each jurisdiction. As our primary revenue generating operations are in Australia, the majority of our tax liabilities arise and are paid in this jurisdiction.

Taxes applicable to our business include:

Company taxes
State government royalties
Comprehensive employment taxes such as fringe benefits taxes, payroll taxes and various employee insurances.

We also collect and pay a number of additional taxes beyond those which are directly attributable to our business. These include Pay As You Go (PAYG) withholding tax from salary and wages paid to employees.

Given the current structure of our international operations, some companies are subject to the Australian Controlled Foreign Company (CFC) rules. Under these rules, profits generated by relevant overseas entities are attributable and taxable in Australia at the 30 per cent Australian corporate tax rate.

There is a direct correlation between our Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) margin and the total taxes paid. Our taxation payments therefore vary in proportion to earnings which are driven primarily by the iron ore price and cost of production. A summary of our FY20 tax obligations and tax payment history is provided below.

Correlation between taxes paid and iron ore price

	5,000							140
	4,000							120	A$
						1,285		/dry
							100

million
3,000							80	metric

2,000					823		60
A$							tonne
		744
						40
	1,000	642	620		529			20
		690	1,265	653	1,977	3,330
	0	306


		FY15	FY16	FY17	FY18	FY19	FY20

State Government Royalty A$m (LHS)		EBITDA Margin A$/dmt (RHS)


Corporate Tax (incl. employment taxes) A$m (LHS)	Realised Price - Fortescue Revenue A$/dmt (RHS)

Note: While Fortescue's functional (and reporting) currency is US$, the above chart provides the A$ tax obligations, realised iron ore price and EBITDA margin converted using an exchange rate prescribed by the Australian Tax Office.

64 Fortescue Metals Group Ltd Sustainability Report FY20

FY19 INCOME TAX PAYABLE: A$1.67 billion

Taxable income x 30% corporate tax rate - eligible tax offsets

Operating Overview review financial and

Australian Tax Office Report

Each December, the Australian Taxation Office (ATO) issues a Report of Entity Tax Information, which provides high level details of Fortescue's income tax return.

The following details are expected to be published by the ATO in December 2020 with respect to Fortescue's income tax return lodged for the financial year ended 30 June 2019. All figures

are disclosed in Australian dollars.

Fortescue Metals Group Ltd ABN 57 002 594 872

TOTAL INCOME

A$12,301,363,067

TAXABLE INCOME

A$5,661,962,372

INCOME TAX PAYABLE

A$1,671,425,248

The following additional information provides important context for

the information anticipated to be published by the ATO:

The information provided by the ATO only reflects Fortescue's Australian tax consolidated group, which is comprised of Fortescue and its wholly owned subsidiaries in Australia
Total income represents gross revenue from all operating activities and not Fortescue's profit. Fortescue's Australian accounting profit for the year ended 30 June 2019 was A$6.005 billion
The income tax payable of
A$1.67 billion is determined by multiplying Fortescue's taxable income of A$5.66 billion by the 30 per cent corporate tax rate and then deducting eligible tax offsets (such as the research and development incentive and foreign income tax offset credits) totalling A$27 million for the year ended 30 June 2019.

International related party transactions

Fortescue has a relatively small proportion of international related party dealings.

In accordance with our tax strategy, all international related party dealings are conducted with arm's length principles, methodologies as prescribed by the Australian transfer pricing laws, and the Organisation for Economic Cooperation and Development guidelines.

We disclose all material international related party transactions through the lodgement of tax returns and other statutory disclosures to revenue authorities, including our detailed International Dealings Schedules and Country-by-Country reports.

Our Group includes a number of active subsidiary companies that are incorporated in jurisdictions outside of Australia. These are summarised in the table on page 66 and 67.

approach Our sustainability

Governance Corporate

with Engaging stakeholders

high Setting standards

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Fortescue Metals Group Ltd Sustainability Report FY20 65

Setting high standards

Active Subsidiary Companies

Jurisdiction

Nature of activities

Singapore*

China

Hong Kong

United

States of

America

FMG International Pty Ltd (FMGI) is a Singaporean resident entity, which is 100 per cent directly owned by Fortescue.
Since 2012, FMGI manages the majority of our shipping services including chartering activities, voyage operations, technical and crew management, as well as the commercial management of Fortescue's ore carriers.

Shipping • Under the Transportation Operations Agreement, FMGI provides ship

services management services to FMG Hong Kong Shipping Ltd (FMGHKS).

	•	FMGI lodges an income tax return in Singapore and consequently pays income
		tax at the prevailing corporate income tax rate of 17 per cent on its total taxable
		income for the financial year. In Australia, the majority of the taxable income in
		Singapore is attributed back to Fortescue under the CFC provisions and taxed
		at 30 per cent.

	•	Fortescue Insurance Singapore Pte Ltd (Fortescue Insurance) provides
		insurance services to Fortescue and its subsidiaries. This company is taxed at
		the standard rate of tax in Singapore of 17 per cent. However, the total taxable
Other		income of Fortescue Insurance is attributed back to Fortescue in Australia and
	taxed at 30 per cent.
services	•	Fortescue has a number of holding companies incorporated and domiciled in

Singapore. The primary purpose of these entities is as a holding company for investments.

No income was generated in Singapore in FY20 by these entities.
FMG Trading Shanghai Co., Ltd (FMG Trading) is a wholly owned subsidiary of Fortescue, domiciled in China.
The key purpose of the entity is to supply iron ore products directly to Chinese customers in smaller volumes, in renminbi from regional ports.
In 2013, Fortescue and Formosa Plastics Group (Formosa) announced a joint venture to develop and operate the Iron Bridge project. FMG Iron Bridge Ltd (FMG IB) is a Hong Kong resident company which is jointly owned by Fortescue

Magnetite	(88 per cent) and Baosteel Resources International Co. Ltd, a subsidiary of
investment	China's Baowu Group (12 per cent).

FMG IB was incorporated as a result of a restructure of Baosteel Resources interest in the magnetite tenements. The entity has not generated any income for the year ended 30 June 2020.
Fortescue's wholly owned subsidiary, FMGHKS provides iron ore transportation

Shipping	services to wholly owned subsidiary FMG Pilbara Pty Ltd under a
services	Transportation Services Agreement utilising ore carriers.

FMGHKS is taxed in Australia under the Australian Shipping Regime.
FMG America Finance Inc has been Fortescue's registered issuer of certain US dollar debt facilities.
No income was generated in the USA in FY20.

66 Fortescue Metals Group Ltd Sustainability Report FY20

Active Subsidiary Companies

Jurisdiction	Nature of activities

Operating Overview review financial and

South America*

Portugal*

Kazakhstan

	•	We operate offices and have hired team members to support exploration
		activities and future company operations in Ecuador, Colombia and Argentina.
	•	We engage a number of local vendors and employees, consistent with our
		commitment to contribute to the local economy.
	• No income was generated in South America in FY20.

	•	Ecuador Fortescue S.A. is Fortescue's wholly owned subsidiary in Ecuador.
Ecuador	•	We maintain possession of 32 mining concessions, all of which are in
	exploration phase.

	• No income was generated in Ecuador in FY20.

	•	Colombia Fortescue S.A.S. is Fortescue's wholly owned subsidiary in Colombia.
Colombia	•	The entity's corporate purpose is to assess, acquire and develop mining
	tenements in Colombia.

	• No income was generated in Colombia in FY20.

Argentina	•	We have two wholly owned subsidiaries in Argentina, being Argentina
	Fortescue S.A.U. and Argentina Minera SA.
	•	No income was generated in Argentina in FY20.

	•	Portugal Fortescue Unipessoal Lda, is a wholly owned subsidiary of Fortescue,
		domiciled in Portugal.
	•	The entity's corporate purpose is to assess, acquire and develop mining
		tenements in Portugal.
	•	No income was generated in Portugal in FY20.

	•	Kazakhstan Fortescue LLP is Fortescue's wholly owned subsidiary in Kazakhstan.
	•	The entity's corporate purpose is to assess, acquire and develop mining
		tenements in Kazakhstan.

• No income was generated in Kazakhstan in FY20.

approach Our sustainability

Governance Corporate

with Engaging stakeholders

high Setting standards

Note: This list includes only those subsidiaries that have employees and purchase goods and services.

Companies subject to the Australian CFC rules. Under these rules, profits generated by these subsidiaries from trading with us are taxable at the Australian Corporate Tax rate.

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Fortescue Metals Group Ltd Sustainability Report FY20 67

Our approach to climate change, protecting biodiversity and sustainable water management

Safeguarding the environment

Approach to climate change

Fortescue is committed to taking a leadership position on climate change.

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										e	R
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									c
								n
							e
						i
						l
						i
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						e
					r
	d	i	n	g



l
i
u
B									Four key

						elements of
E						strategy

duci n g e m i s

s i

o n s

our

Climate Change Strategy

Our Climate Change Strategy focuses on implementing innovative and practical emissions reduction initiatives to maximise opportunities and proactively mitigate and manage climate-related risks in a transitioning economy.

Metric and targets

Governance Corporate

l e

o n

a tu

This year, we revised our long-term emissions reduction goal to achieve net zero operational emissions by 2040. This goal is core to our Climate Change Strategy and is underpinned by a pathway to decarbonisation, including the reduction of Scope

1 and 2 emissions from Existing Operations by 26 per cent from 2020 levels, by 2030.

with Engaging stakeholders

Setting standards

Fortescue is committed to taking a leadership position on climate change.

We accept the scientific consensus as assessed by the Intergovernmental Panel on Climate Change (IPCC) and support the Paris Agreement goal of limiting global temperature rise to well below 2°C above pre-industrial levels.

Climate change is a complex and challenging issue impacting governments, businesses and communities all over the world. Successful mitigation and adaptation to climate change impacts requires a collaborative approach to ensure we succeed as a global community in protecting our environment for future generations, while maintaining economic stability and sustainable growth.

As a values-based business, we acknowledge our responsibility to engage with, and accelerate the transition towards, a net zero emissions global economy. We are committed to taking a leadership position on climate change and believe this will drive shareholder value over the longer term, while meeting the expectations of our internal and external stakeholders.

Our Board has overall responsibility for the oversight of climate-related matters and our dedicated Climate Change Committee (CCC) provides advice to the ARMC and the Board.

Risk management

The transition to a low carbon economy presents both opportunities and risks and we are implementing measures to mitigate and manage these risks and optimise opportunities.

The evaluation of climate change risks and opportunities is integrated into our company wide risk management process. Fortescue's Risk Management Framework (FRMF) ensures a consistent approach to the recognition, measurement and evaluation of all risks and opportunities, including those related to climate change.

We undertook a climate change focused risk assessment in June 2020.

high

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Fortescue Metals Group Ltd Sustainability Report FY20 69

Safeguarding the environment

LONG - TERM GOAL

Net zero

operational emissions by 2040

Material climate-related risks and opportunities

Transitional risks

Reduced product demand
Technical innovation is not delivered at commercial scale to support required emissions reductions
Reputational damage

Physical risks - acute

Cyclone frequency and intensity
Bushfire frequency and intensity

Physical risks - chronic

Change in precipitation patterns
Rising sea levels and storm surge inundation

FY20 Performance

Our FY20 Scope 1 emissions were

1.93 million tonnes of CO2-e and Scope 2 emission were 0.16 million tonnes of CO2-e. Since FY15, the emissions intensity in electricity generation (Scope 1) has reduced by 16 per cent.

Our FY20 Scope 3 emissions from crude steel manufacturing and shipping are estimated to be

244.5 million tonnes of CO2-e.

Fortescue's FY2Climate Change Report is part of our annual reporting suite which also includes the FY20 Annual Report, FY20 Sustainability Report and FY20 Corporate Governance Statement, all of which are available on our website at www.fmgl.com.au

The report is aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Governance		Strategy
Governance of		Impacts of climate-related
climate-related risks	risks and opportunities on
and opportunities			business, strategy and
Industry			Wholly
leading			financial planning
		owned, fully
cost	Core elements	integrated
position	supply chain
	of the TCFD

recommendations

Metrics and targets

Metrics and targets used	Risk management
Processes used to
to assess and manage
identify, assess
relevant climate-
and manage
related risks and
climate-related
opportunities
risks

Protecting biodiversity

OBJECTIVE

ToObjectivetake responsibility for Fortescue's disturbance by protecting biodiversity in the regions where we operate.

TARGET

Achieve a net positive impact on biodiversity
Annually, achieve zero significant environmental incidents.

0	A$1.72m	0
Number of	Invested in research	Fines or sanctions
significant	and conservation	relating to
environmental	programs in FY20	environmental impact
incidents		grievances

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	Governance Corporate
stakeholders	with Engaging

high Setting standards

We are committed to safeguarding the environment and take a precautionary approach to environmental management. We acknowledge that our activities have the potential to impact the environment and are committed to minimising these impacts by integrating mitigation measures into all stages of our operations.

Compliance with all relevant environmental laws and obligations is the absolute minimum standard to which we comply. We respect legally designated protected areas and conservation listed species.

We align our activities with the

2003 ICMM position statement on Mining and Protected Areas and the legal instruments relating to our

areas of operation, including local, state, national and international. This includes the IUCN Red List of Threatened Species.

Specialists within our Environment team are responsible for protecting biodiversity and ensuring that we take a proactive approach to all matters in the regions where we operate.

The ARMC, on behalf of the Board, is responsible for overseeing all matters relating to environmental management. It is the collective responsibility of all employees to safeguard the environment for future generations through responsible environmental management.

We work closely with our stakeholders, including state and

federal government agencies, Traditional Custodians and the general community to ensure appropriate mitigation practices are in place. We also implement the mitigation hierarchy of avoid, minimise, rehabilitate and offset throughout all our activities.

Our Environmental Policy and Environmental Management System (EMS) reflects our commitment to continual improvement and provides a robust and comprehensive framework for the identification and management of environmental impacts. An updated Policy was reviewed and approved by the Board during FY20.

Our EMS aligns with the requirements of ISO14001:2016

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Fortescue Metals Group Ltd Sustainability Report FY20 71

Safeguarding the environment

International Standard for Environmental Management Systems.

During FY20, we introduced a Biodiversity Standard. This provides guidance and ensures consistency across our local and international activities relating to:

Identification of biodiversity values in the regions where we operate
Mitigation measures to address the biodiversity risks of our activities throughout the project cycle
Identification of biodiversity conservation opportunities.

Our biodiversity specialists are supported by external consultants to survey exploration, development and operational areas. We use data collected during the surveys to inform project design and operational activities and contribute to detailed environmental impact assessments. The outcomes of these biological surveys assist with developing sound biodiversity protection measures.

Significant fauna

We implement a Fauna Management Plan (FMP) across our sites to identify potential impacts to Conservation Significant Fauna and ensure effective management and monitoring measures are in place. These measures aim to maximise the protection and conservation of these fauna within areas adjacent to our sites.

Fauna managed in accordance with the FMP include the Pilbara Olive Python, Night Parrot, Northern Quoll, Greater Bilby, Ghost Bat, Pilbara Leaf-nosed Bat and various migratory birds. Monitoring of these species to date has determined that, with the exception of the Night Parrot which has not been recorded at any of our sites, Conservation Significant Fauna continue to reside in habitats surrounding

our operations and have not been significantly impacted by our mining or rail activities.

Research and conservation

We continue to contribute to research and conservation initiatives which improve the collective body of environmental knowledge in the areas where we operate.

We also support ongoing relationships with government, universities and other researchers.

During FY20, we contributed to a number of initiatives including:

A$734,000 to fund biodiversity protection programs at the Fortescue Marsh as part of a long-term strategic collaboration with the Department of Biodiversity, Conservation and Attractions (DBCA). This includes the implementation of feral animal control programs, contributions towards our Marsh Management Strategy and the funding of our dedicated Marsh Conservation Officer. Since 2008, we have contributed over A$6.2 million to this program
Continued investment in research to investigate the distribution, abundance and ecology of the Greater Bilby in the Pilbara region
Continued research in conjunction with DBCA and third parties on the effectiveness of the Felixer™, a grooming trap for cat control and the associated benefits to the Northern Quoll in the Pilbara
A$625,000 towards monitoring programs to improve the knowledge and management of

CASE STUDY

New technology for Night Parrot monitoring program

How would you locate one of Australia's most elusive and critically endangered birds in an area the size of 16,000 football fields? We have found that the best science, leading global experts, the latest technology and a significant amount of sampling are all key.

The Night Parrot is a small, nocturnal bird that is endemic to Australia. The species underwent a severe population decline in the early 20th century and is currently listed as Critically Endangered

rare and threatened fauna species including sub-terranean fauna, the Pilbara Leaf-nosed Bat, the Pilbara Olive Python, the Night Parrot and the Northern Quoll

A$320,000 towards monitoring programs to enhance the knowledge and management of threatened or otherwise conservation significant flora species and ecological communities including Pityrodia sp. Marble Bar and the Themeda grasslands on cracking clays ecological community
A$50,000 contribution to the WA Parks Foundation as part of our 15 year partnership to enhance and protect biodiversity and inspire local communities to connect with nature
In-kindsupport to the Subterranean Fauna Research Program led by the Western Australian Biodiversity Science Institute to establish best practice survey methods and monitoring protocols as well as improvements to data discoverability and accessibility.

under State and Commonwealth legislation as well as listed on the IUCN Red List of Threatened Species.

We recently collaborated with leading experts to develop

a comprehensive three year monitoring program of the Night Parrot at the Fortescue Marsh. The program involves the use of automated acoustic (audio) sampling devices, with the aim of recording Night Parrot calls within the project area. New mobile data collection applications have also been developed to assist with the extensive field sample collection and redeployment of recording devices at over 200 locations within the project area for the duration of the project.

Despite this extensive program, monitoring to date has not detected the presence of the Night Parrot.

72 Fortescue Metals Group Ltd Sustainability Report FY20

CASE STUDY

Spotlight on our environmental offsets

Dust management

Fortescue maintains a high level of vigilance over its management of dust in Port Hedland. In collaboration with the WA State Government, the Port Hedland Industries Council and the local community, we ensure that best practice techniques are implemented to minimise impacts.

Our operations are subject to strict dust management controls and we maintain the highest standards to protect the health of our workforce and the wider Port Hedland community.

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	Corporate

Offset programs are designed to counterbalance residual environmental impacts. Our offsets program has been delivering environmental benefits for over a decade.

One of our longest running programs is the management of the Fortescue Marsh located near our Cloudbreak and Christmas Creek mines in partnership with the DBCA. This offsets program has delivered

Protection of the

Fortescue Marsh

Our Cloudbreak and Christmas Creek mine sites lie north of the Fortescue Marsh, a wetland of national significance listed on the Directory of Important Wetlands of Australia. The Marsh is also culturally significant to the Banjima, Nyiyaparli and Palyku Traditional Custodians.

We implement mitigation and management measures that are consistent with the WA State Government Fortescue Marsh Management Strategy (2018-24) to ensure the protection of the Marsh.

Incidents and monitoring

All environmental incidents are fully investigated. During FY20, there were no significant environmental incidents and no fines/sanctions or environmental impact grievances filed against Fortescue.

long-term environmental benefits for the Fortescue Marsh ecosystem and its flora and fauna.

Key program deliverables include feral cat management, weed control programs and the funding of a dedicated DBCA Conservation Officer. Research and monitoring continue to build on our understanding of the biodiversity and ecological importance of this internationally recognised wetland.

We undertake stringent internal compliance auditing on an ongoing basis across all our sites to measure compliance against environmental obligations and relevant standards.

Internal compliance is complemented by external independent audits. During FY20, the Western Australian Department of Mines, Industry Regulation and Safety

and the Department of Water and Environmental Regulation completed numerous field and desktop audits across our operations, including exploration and development sites.

The audits assessed compliance against Ministerial Statements issued under the Environmental Protection Act 1986 (WA), Mining Proposals and Program of Works under the Mining Act 1978 (WA). All audits determined that we had demonstrated a high level of compliance and that our operations align with the expectations of regulators.

Monitoring during FY20 continued to show that Port Hedland's air quality has remained constant over the past nine years, despite a significant increase in product exported by Fortescue and other port users. We recognise that dust is an issue for the local community and will continue to operate with transparency to ensure that

our employees and the wider community are kept up to date on this matter.

We also undertake air quality monitoring, reporting and modelling at our other sites. These measures indicate that our operations conform with legislated limits and standards. We have

a framework for managing the health risks of exposure to airborne dust particles, which applies to all activities associated with our operations and projects. Our testing of respirable and airborne dust particulates is

in accordance with legislative requirements.

During FY20, we participated in discussions with the State Government and industry regarding the proposed Voluntary Land Buy-back Scheme in Port Hedland. While the scheme falls within the boundary of the Town of Port Hedland, it is not directly related to the operation of our port facility. We will continue to consult with government and the community on the future development of the Town of Port Hedland.

Governance

with Engaging stakeholders

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Fortescue Metals Group Ltd Sustainability Report FY20 73

Safeguarding the environment

Sustainable water management

OBJECTIVE

Lead a better understanding of regional hydrogeologicalObjective systems where we operate.

TARGET

Initiate, host and coordinate a series of Mine Water Management Forums about the Pilbara Region of Western Australia to encourage the sharing of learnings for practitioners and regulators.

OBJECTIVE

Use water responsibly by improving water use efficiency and minimising water loss through surface water discharge and evaporation.

TARGET

Annually, ensure at least 75 per cent of dewatered water at the Cloudbreak and Christmas Creek mine sites is used for beneficial purposes or reinjected via the Managed Aquifer Recharge (MAR) program.

170GL	116.5GL	98%
Total water	Total water returns	Water reinjected or
withdrawn	to the environment	used for beneficial
		purposes

74 Fortescue Metals Group Ltd Sustainability Report FY20

Water is a critical resource and its effective management is fundamental to the sustainability of our operations and the ecosystems and communities in which we operate.

We take a proactive approach to responsible water management and acknowledge that our operations have the potential to impact water resources. We mitigate impacts

by complying with all regulatory requirements as the absolute minimum and implement sustainable water management practices across all sites.

Our dedicated Water Management team provides technical support across the business during all stages of operations including planning and approvals. Specialist advice is provided on a wide range of issues including flood management, water supply, climate change and dewatering.

Our operations use water for ore processing, dust control and for village requirements including the supply of drinking water. This water is primarily sourced from local groundwater resources, with minor quantities of water purchased from municipal suppliers. Our Port Operations also use seawater, which is treated as required using desalination. Surface water is not used to supply water to any of our operations.

In addition to direct operational requirements, we also manage key environmental water requirements including:

Maintenance of groundwater levels on the boundary of the Fortescue Marsh, adjacent to our Cloudbreak and Christmas Creek mine sites
Maintenance of groundwater levels at the boundary of the Karijini National Park
Maintenance of water levels in some permanent pools in Kangeenarina Creek and Weelumurra Creek adjacent to the Solomon Hub
Ensuring that mining activities do not impact the water quality or hydrological regime of Site 12 Pool, adjacent to North Star.

As some of our ore bodies sit below the groundwater table, we abstract water to mine in a process known as mine dewatering. The water resulting from this process is reused wherever possible, forming a key water source at the Cloudbreak, Christmas Creek and Solomon mine sites. The reuse of water is subject to a water quality hierarchy, which ensures that reused water is of a suitable quality for each purpose, including the environmental requirements for water reinjected into the local groundwater system.

At the Christmas Creek and Cloudbreak mine sites, where the mine dewatering volumes exceed the operational and environmental water requirements, excess water is returned to the environment via reinjection. With the exception of regulated environmental water requirements, we do not discharge excess water to surface water bodies. During FY20, no excess water was discharged to surface water.

Managing water risk

Our evaluation of water related risks and opportunities, including those related to climate change, are integrated into multidisciplinary, company wide risk management processes and are considered as part of our overall business strategy. Facility level risk assessments are undertaken regularly as part of mine planning processes, including operational and environmental risks, constraints and challenges.

We minimise our impact on water resources by applying adaptive responses to water management. We assess the overall water risk of our operations against several risk measures including the BETA Aqueduct Water Risk Atlas, which provides water stress risk ratings.

Our Cloudbreak and Christmas Creek mine sites are located in low water risk areas and our Solomon and Eliwana mine sites are located in a low to medium-risk area. Our Iron Bridge development is located in a high-risk area. To manage this risk, water for the site is sourced from a lower risk area and transported via a pipeline to the site. We do not have operations or developments located in areas defined as 'water stressed' by the BETA Aqueduct Water Risk Atlas.

Our water-related risks are assessed and addressed on an ongoing basis. The assessment considers our operational risks at a site level and the actions required to address them. Key operational risks are outlined in the table on page 76.

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Fortescue Metals Group Ltd Sustainability Report FY20 75

Safeguarding the environment

Our water-related risks

Asset (Location)	Water-related risks	Actions to address

		•	Operate the Chichester Managed Aquifer
			Recharge (MAR) program to minimise water
Cloudbreak and	Potential impacts to		level change near the Marsh
•	Apply a set of triggers to inform mitigation
Christmas Creek	the Fortescue Marsh
	measures if unforeseen changes occur
		•	Monitor groundwater levels
		•	Monitor groundwater dependent vegetation

		•	Monitor groundwater levels, surface
Solomon, Eliwana	Potential impacts		water levels and quality, as defined by
	environmental conditions
and Iron Bridge	to pools
•	Implement supplementation activities, where

required

All	Potential impacts to
stygofauna

Identify extents of habitat and characterise stygofauna species
Manage groundwater drawdown

All

Potential impacts to	•	Monitor groundwater levels
groundwater dependent	• Manage groundwater drawdown
vegetation	•	Monitor groundwater dependent vegetation
	•	Engagement with stakeholders regarding
Potential impacts to other		potential impacts and management measures
•	Adherence to catchment scale water
water users including		allocations
pastoralists
•	Installing additional water infrastructure

		where required
Increased flood risk due	•	Assessment of risk to critical infrastructure
	using various climate change scenarios
to climate change	•	Updates to flood protection design criteria,

where required

		•	Maintain a range of water supply options
		•	Monitor and manage existing and future water
	Balancing mine site water		supply sources
	•	Conduct studies to assess potential
Operational	demand with available
water supply within the		environmental impacts and inform appropriate
mine sites		triggers for management actions
constraints of regulatory
	•	Implement best practice techniques
	approvals
			for mitigating environmental impacts
			such as Managed Aquifer Recharge and
			supplementation

		•	Update hydrological models with any new
Operations	Flood risk during wet		data
•	Conduct an annual risk assessment and
and projects	season
	implement a wet season preparedness plan
		•	Monitor impacts during flood events

		•	Conduct hydrogeological investigations prior
			to pit development
Operational	Risk to mining production	• Design appropriate water management
due to insufficient		infrastructure through the use of integrated
mine sites		hydrogeological numerical models and water
dewatering
		system models

		•	Monitor dewatering response and feedback
			into design

76 Fortescue Metals Group Ltd Sustainability Report FY20

We operate in some areas that are adjacent to sensitive ecological habitats such as national parks, significant wetlands, permanent pools and groundwater dependent vegetation. To mitigate the potential impacts of our operations in these areas, we conduct supplementation to maintain environmental water levels.

In addition, we are subject to a number of environmental protection obligations as well as voluntary monitoring programs to minimise impacts to these ecosystems.

Water stewardship

Fortescue recognises the importance of water resources in the Pilbara and we are committed to sustainably managing water resources to avoid impacts to the environment and other water users. We manage water resources strategically across our operations, with site-specific water balances

used to quantify supply and demand and identify opportunities to improve water use efficiency. We minimise losses through evaporation by avoiding surface water discharge.

Water management activities at each of our sites including allocation, are undertaken in accordance with a combination of regulatory and voluntary requirements.

Each site is subject to regulation under Part IV and Part V of the Environmental Protection Act 1986, in addition to licensing under the Rights in Water and Irrigation Act

1914 (RIWI Act). These legislative obligations outline the minimum standards in water management required to protect the environment and other water users. Impacts are tracked through monitoring.

Water allocations are regulated by the Department of Water and Environmental Regulation (DWER) under the RIWI Act.

The objectives of the RIWI Act include:

Providing for the sustainable use and development of water resources
Protection of the ecosystems and the environment in which water resources are situated.

A section 5C licence to take water under the RIWI Act must be negotiated with relevant stakeholders including other water users in the area. A 5C licence requires the preparation of a groundwater operating strategy which must include a monitoring regime and ongoing communication with relevant stakeholders.

We monitor water quality and quantity at our operations, along with the health of key local ecosystems and habitats. This monitoring allows us to ensure impacts are minimised and that we are operating in compliance with regulatory requirements.

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Fortescue Metals Group Ltd Sustainability Report FY20 77

Safeguarding the environment

The Papa Waringka

MAR scheme

Dewatering accounts for the majority of water abstracted at our operations. Our Managed Aquifer Recharge (MAR) programs minimise environmental impacts and maintain the water balance, by ensuring as much water as possible is returned to the natural environment through reinjection to the local groundwater systems.

CASE STUDY

Solomon makes major progress in dewatering

Fortescue's first ever horizontal bore was commissioned at the Solomon mine site during FY20

and has since earned an award nomination.

The project was initiated to address the loss of in-pit bores from mining activities and to reduce risks to the autonomous haulage system.

The Horizontal Directional Drilling (HDD) project replaces

dewatering bores from the active mine area with a directional drilled bore. Manager Drilling, Chris Oppenheim said, "It achieves this by drilling from outside the pit then down along the base of the ore body. The drill hole is then cased and a pump is installed."

"The HDD bore can replace a bore field of 15 conventional bores and will save over $1 million annually," Mr Oppenheim said.

Members of the Drilling, Hydrogeology, Dewatering and Capital Projects teams have been involved in the project and plan to install more horizontal bores at the Solomon mine site. Use at other sites will also be considered.

The project was shortlisted for the Innovation and Technology award at the Australasian Groundwater Conference in November 2019.

The Papa Waringka MAR scheme has been operating at the Cloudbreak and Christmas Creek mine sites since 2009. Named after the traditional Nyiyaparli word for water of the ground, this scheme has progressively expanded to its current scale of 349 abstraction bores, 134 injection bores and 12 transfer ponds.

The scheme currently returns over 110 gigalitres (GL) per annum of abstracted groundwater and involves the reinjection, storage and redraw of water to form a hydraulic barrier between dewatering operations and the internationally significant Fortescue Marsh ecosystem. The scheme is one of the largest in Australia and the first to be operated in a variable density groundwater environment.

Implementation of the scheme allows:

Conservation of the brackish water resource for redraw over the life of the mine
Minimising the drawdown footprint from the dewatering operation, particularly on the Fortescue Marsh
Limiting environmental and cultural impacts associated with the surface discharge of excess water to the Fortescue Marsh, where prolonged surface discharge to a naturally dry area can lead to dependency of vegetation and associated fauna
Sharing learnings with regulators and peers.

The scheme is a temporary water management system which will be dismantled and rehabilitated on completion of mining, allowing for the return of the natural groundwater system.

During FY20, 145 GL of groundwater was abstracted under the scheme, with 30 GL reused for ore processing, dust suppression and camp supply and 111 GL reinjected into local aquifers.

78 Fortescue Metals Group Ltd Sustainability Report FY20

Closure and rehabilitation

Operating Overview review financial and

Mine closure

Fortescue mine closure planning focuses on returning the land to a state that provides future use and value.

We work with our stakeholders including local communities, Traditional Custodians and government agencies when considering post-closure land uses and developing achievable outcomes. Although none of our sites are expected to close within 10 years, we undertake various studies and field trials to demonstrate the feasibility of the closure strategies detailed in our mine closure plans. Financial provisions for closure are developed for all our sites and revised every six months to capture our mine and rehabilitation progress. These provisions are further outlined in our FY20 Annual Report which is available on our website at www.fmgl.com.au

Mine closure is a key consideration during the project feasibility phase, when closure outcomes are agreed with stakeholders and site strategies created to minimise environmental impacts. To minimise the potential financial, social and environmental risks of mine closure, we review strategies over the life of each operation to ensure maximum effectiveness of rehabilitation activities and future uses.

Planning for closure starts when a project is being developed and continues throughout the mine life to ensure that the impacts of mining can be managed in an environmentally, socially and economically responsible manner. Our closure planning cycle includes an annual closure review to ensure we develop outcomes that meet stakeholder needs and allow for sufficient time to consider 'accepted norms' and obligations and ensure the best solutions can be implemented.

During FY20, mine closure works focused on the following:

Additional waste rock characterisation and the establishment of a waste rock landform erosion trial at the Solomon Hub mine
Continued geochemical kinetic test work at the Eliwana mine
Review and update of the Solomon Hub, Eliwana, Iron Bridge project and Cloudbreak mine closure plans
Establishment of closure plans for the rail network and port facilities
Collaboration with industry peers to establish the
Cooperative Research Centre for Transformations in Mining Economies (CRC-TiME).

Sustainable rehabilitation

We have adopted a multidisciplinary approach to sustainable rehabilitation as we aim to ensure that progressive rehabilitation activities are integrated into all standard operating procedures and that closure environmental performance objectives are met. To achieve this, we have developed a range of practical, achievable solutions which ensure responsible rehabilitation practices are implemented throughout the mine life cycle. We consider a range of sustainable options which are fully costed prior to adoption.

We apply an integrated approach where rehabilitation monitoring

procedures consider local environmental issues, using indices such as plant species diversity and composition, nutrient cycling, infiltration and erosion. Several rehabilitation monitoring programs have been postponed until FY21 due to restrictions on site travel related to the COVID-19 pandemic.

Our ongoing monitoring programs achieved the following during FY20:

11 rehabilitation and associated transects
11 photographic monitoring points
A weed mapping program of the North Star Pipeline Corridor.

During FY20, rehabilitation works included:

Direct disposal (backfill) of more than 170 million tonnes of waste rock into exhausted mine pits
Continued geochemical and physical characterisation of the mineral waste rock
Ongoing review, involving computer modelling, of proposed post-mining landforms and water systems.

Partnerships and collaboration

During FY20, we met with industry peers to better understand and improve rehabilitation practices. Our involvement in the Pilbara Rehabilitation Group, which includes participants from Rio Tinto, BHP and Roy Hill, has resulted in greater awareness and sharing of knowledge regarding rehabilitation in the Pilbara.

approach Our sustainability

Governance Corporate

with Engaging stakeholders

high Setting standards

Directory Corporate positive Creating the Safeguarding change socialenvironment

Fortescue Metals Group Ltd Sustainability Report FY20 79

Safeguarding the environment

Tailings management

Continued	Satellite based	Participation in
engagement	Interferometric	the Global Tailings
with experts and	Synthetic Aperture	Review
regulators	Radar trial

80 Fortescue Metals Group Ltd Sustainability Report FY20

In FY20,

25.8 million tonnes of tailings were produced at

our sites

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Fortescue's management of the storage of tailings includes rigorous design practices, comprehensive monitoring and management programs, independent auditing and a strict corporate governance regime

Generation of tailings

Fortescue's iron ore processing facilities generate a fine-grainedby-product, referred to as tailings. This material is pumped as a slurry via pipelines to specifically designed Tailings Storage Facilities (TSFs). Over time, the fine-grained material settles, allowing water to be recovered and recycled.

Our effective management and storage of tailings includes:

•	Rigorous design practices
•	Comprehensive monitoring and
	management programs

Our tailings storage

We currently operate four active TSFs and manage an additional six inactive facilities. All of our facilities are located in the Pilbara region of Western Australia.

Two of the inactive facilities have been rehabilitated, one is in the process of being rehabilitated and another two are being dried for future rehabilitation. The final inactive TSF is located at our Iron Bridge project and is in care and maintenance.

The active TSFs are located at our operational mine sites at Cloudbreak, Christmas Creek and Solomon Hub. None of our TSFs are considered to be large or complex engineering structures, or operated in geotechnically, geologically, topographically or meteorologically complex settings.

We do not employ the upstream raise as a TSF design or construction method. All of our TSFs are located in remote areas and there are no communities situated near any facilities.

As part of the TSF design phase, a number of aspects are considered which include the location of mining infrastructure, employees and communities, areas of environmental significance, topography, geological and climatic conditions, surface and groundwater, future land use, tailings characteristics and seismic activity of the area.

Our TSF register, containing detailed information on each TSF, can be found on the Environment page on our website at www.fmgl.com.au

Governance Corporate

with Engaging stakeholders

high Setting standards

•	Independent auditing
•	A strict corporate governance
	regime.

We make use of internal expertise together with external design and review consultants. This ensures that our TSFs are designed, operated and closed to the highest standards, minimising any environmental and community impacts and ensuring operational efficiency.

The tailings produced during the production of our iron ore are geochemically benign and therefore pose a negligible environmental and/or health contamination risk.

In FY20, 25.8 million tonnes of tailings were produced at our sites.

	Performance	Planning,
and risk control	design and
	Improvements	construction
	06	01
Independent	Tailings
dam safety	05 Management
reviews	02
	Framework	Operation
			management
	04	03
Dam safety	Performance

inspection	reconciliation and

	design validation

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Fortescue Metals Group Ltd Sustainability Report FY20 81

Safeguarding the environment

Our tailings management framework

Fortescue carries out all tailings management activities including design, construction and monitoring in accordance with the requirements of risk-based TSF management

set out in the Western Australian Government's Department of Mines, Industry Regulations and Safety (DMIRS) tailings guidelines and the Australian National Committee on Large Dams (ANCOLD) guidelines. The risk-based process ensures risks are identified and reviewed, and that implementation and control effectiveness are monitored and audited. This process also assists in mitigating the impacts of failure through targeted response plans.

We implement a life-cycle TSF management framework. The objective of this framework is to define, understand, prioritise, control, mitigate and effectively eliminate TSF failure.

Our TSF risk management framework is underpinned by three preventative critical control groups.

Critical Control Group #1 Risk and consequence-basedplanning, investigation, design and construction supervision and quality assurance and quality control
Critical Control Group #2 Observational Trigger, Action, Response Plan (TARP) based operation, surveillance (inspection and monitoring) and maintenance
Critical Control Group #3 Risk-focusedcondition, performance and dam safety based inspections, reviews, audits and corrective planning and implementation. Each active TSF has a comprehensive operations, surveillance and monitoring plan and a Dam Safety Emergency Plan that act in parallel with the site Emergency Response Plan.

Inspections and audits

Fortescue implements internal TSF monitoring programs that include daily, weekly, fortnightly, monthly and quarterly visual inspections and instrumentation surveillance monitoring and alarm systems. All tailings related team members are trained and must be assessed as competent prior to operating a TSF.

Each active TSF is also inspected by the external design engineer annually to ensure the facility is being operated in accordance with the design intent. Each tailings facility (active and inactive) is also audited annually by independent experts to ensure the ongoing safety and integrity of each facility. The most recent design engineer inspections and external audits were completed in late 2019.

In addition, a corporate risk assessment of all our TSFs is conducted annually and reported to the Board with the most recent assessment completed in March 2020. We will continue to engage with tailings storage management experts and regulators to ensure risks are mitigated and managed effectively.

Global Tailings Review

During FY20, internal specialists attended the Global Tailings Review (GTR) industry and regulators public consultation session held at the Chamber of Minerals and Energy WA in Perth. The session was attended by consultants and representatives from a number of resource companies.

CASE STUDY

Tailings water and dust monitoring trial

This year, Fortescue commenced a 12-month trial

of satellite based Interferometric Synthetic Aperture Radar (InSAR) monitoring at its Solomon Hub.

This monitoring provides increased resolution of monitoring data for tailings containment structure displacements than can be achieved with other methods. By processing historical and new satellite data, InSAR will significantly increase the amount of collected data and will complement existing monitoring systems.

This application of InSAR monitoring and its wider benefits in tailings water and dust management will be further explored in FY21.

Following the devastating tailings storage failure in Brumadinho, Brazil in January 2019, the GTR was initiated by the International Council on Mining and Metals (ICMM), the United Nations Environment Programme (UNEP) and the Principles for Responsible Investment (PRI). The GTR aims to establish a Global Tailings Standard (GTS) to improve the safety of tailings facilities by mandating improvements. The GTS is scheduled for release in August 2020.

82 Fortescue Metals Group Ltd Sustainability Report FY20

Waste management

OBJECTIVE

ToObjectivereduce waste generation through prevention, reduction, recycling and reuse.

TARGET

By the end of FY20, identify a sustainable disposal method for off-the-road tyres (OTRs) and conveyor belts
By the end of FY20, investigate composting opportunities for food related mine wastes.

We are committed to	89%

reducing waste generation
across our sites	Waste recycled across our sites

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Fortescue Metals Group Ltd Sustainability Report FY20 83

Safeguarding the environment

Our waste management approach aims to reduce waste through prevention, reduction, recycling and reuse of waste produced across all sites. While we continue to investigate options to minimise the volumes of non-mineral general waste being sent to landfill, during FY20, we focused on initiatives which reduce and eliminate the use of single use plastics.

This year we formed a dedicated Plastics Reduction Committee to investigate and implement initiatives to reduce the consumption and environmental impacts of single use plastics. Due to the constraints of the COVID-19 pandemic, a number of planned initiatives were delayed and were not able to be implemented in FY20. These initiatives include:

Fortescue's Journey to No Plastic
Solomon Hub pilot program
Containers for Change.

CASE STUDY

Christmas Creek conveyor project uses recycled plastic

We hold regular information sessions with our workforce to promote waste management initiatives including plastic reduction across our sites.

One of our targets for FY20, to identify a sustainable disposal method for off the road tyres (OTRs) and conveyor belts has seen some exciting new developments with multiple vendors moving to develop a sustainable solution to recycle the OTRs and conveyor belts.

Non-mineralised waste

Non-mineralised wastes generated at our sites includes food and food packaging wastes, used oil and office wastes. Where waste cannot be recycled or reused, it is disposed of at regulated landfill facilities on site.

Waste is handled in accordance with our Waste Management Plan and Hazardous Materials Management Procedure. The Waste Management

Plan aims to ensure that the disposal and management of waste does not adversely impact environmental values or the health, welfare and amenity of people. The plan also details the key management actions to achieve the objective of the plan.

No hazardous waste, as classified under the Basel Convention, was generated or disposed of at our sites during FY20.

During FY20, we recycled 89 per cent of non-mineralised waste volumes across all of our sites, excluding tyres and concrete waste. In particular, we recycled in excess of 6,620 tonnes of rubber across all sites. The recycling of our waste in FY20 was impacted by the COVID-19 pandemic which saw access to some of our recycling partners interrupted.

During FY21, we will continue to work with vendors to investigate a sustainable method for recycling OTRs.

Christmas Creek has undertaken a conveyor project to install new safety guards made from recycled plastic which will provide a range of time saving, cost saving, environmental and safety benefits.

Senior Project Manager Madeleine Shoebridge said, "Safety guards on conveyors are used to eliminate hazards due to the potential for rock falls from the crushed ore material during the

rollback of product or an unplanned event. The fatal risk reduction is the primary benefit. However the project also reduces the associated clean up costs by containing any potential ore overflow events."

In a Fortescue first, these new guards have been made from recycled plastic. The new guards use four tonnes of recycled High-Density Polyethylene Plastic.

"The new safety guards are much lighter than conventional guarding

and easier to fabricate and install which has helped the project team reduce the overall execution time and budget, resulting in a safe and cost-efficient installation,"

Ms Shoebridge said.

Using the recycled guards has achieved a 10 per cent saving in installation costs and the team also expects to achieve significant maintenance savings as corrosion is not an issue unlike with conventional steel guards.

84 Fortescue Metals Group Ltd Sustainability Report FY20

Creating positive social change

Building business capabilities

OBJECTIVE

CreateObjectiveeconomic opportunities for Aboriginal businesses through local procurement, business development, mentoring and capacity-building opportunities.

TARGET

By 2021, achieve a spend of 10 per cent of total procurement with Aboriginal businesses, with at least 50 per cent of the number of contracts awarded to businesses which have more than 50 per cent Aboriginal ownership.

6%	A	m	A$2.7bn
	$20
Procurement spend	Funding for Aboriginal	Value of contracts
with Aboriginal	businesses under ANZ	awarded
businesses	leasing facility

86 Fortescue Metals Group Ltd Sustainability Report FY20

Billion Opportunities

Fortescue is committed to creating positive social change within Aboriginal communities through local procurement, business development, mentoring and capacity-building opportunities.

Our Billion Opportunities program is an initiative that promotes sustainable business opportunities for Aboriginal people by building the capability and capacity of Aboriginal businesses. The program forms a critical element of our approach to ensuring economic opportunity and growth for the Traditional Custodians within the regions in which we operate.

Since its commencement in 2011, the program has awarded contracts and subcontracts worth a total value of A$2.7 billion to more than 120 Aboriginal businesses.

In 2017, we partnered with ANZ to initiate a A$50 million funding scheme to allow eligible Aboriginal businesses to access finance at a competitive rate. We act as guarantor which removes the need for the Aboriginal business to provide security, with the facility allowing the Aboriginal business to own the assets at the expiry of the contract and to use them as security in the future. This initiative has already provided A$20 million in funding to nine Aboriginal businesses.

We are committed to spending 10 per cent of our operational procurement budget with Aboriginal businesses.

In FY20, we spent A$354 million with 63 Aboriginal businesses, representing 6 per cent of our total contestable spend. More than 85 per cent of this spend was awarded to businesses owned by Native Title

Groups and their members. During FY20, we reached a milestone with the total value of contracts awarded reaching A$2.7 billion since 2011.

In FY20, we also awarded and extended contracts and subcontracts with a value of A$369 million to Aboriginal businesses.

The Billion Opportunities program will continue to foster change and create sustainable communities. Through its continued success it is hoped the program will inspire other businesses to implement Aboriginal procurement strategies and provide opportunities to thousands of Aboriginal businesses across the country.

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The Billion Opportunities program is complemented by a range of practical measures introduced to provide Aboriginal businesses with the tools to build value and sustainability which in turn creates employment and development opportunities. Key to the success of the program has been:

•	Providing opportunities for
	Aboriginal businesses based
	on their level of capacity and
	capability
•	Building the capability and
	capacity of Aboriginal businesses
	to ensure the businesses remain
	sustainable
• Creating a whole of company
	approach to engaging and
	mentoring Aboriginal businesses
	including setting Aboriginal
	procurement targets and Key

Cumulative value of contracts awarded

to Aboriginal businesses

							A$2.3bn	A$2.7bn
					A$1.9bn	A$2.1bn
				A$1.7bn
			A$1.7bn
		A$1.4bn
	A$0.95bn
A$0.36bn
FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20

with Engaging stakeholders

high Setting standards

the Safeguarding environment

Performance Indicators for our

procurement leaders

Spend per year with Aboriginal businesses

A$354m

• Well established and embedded

procurement processes to ensure

Aboriginal engagement is part of

our tender evaluation.

A major barrier for Aboriginal businesses to build capability is access to capital, as many find it difficult to own assets due to their inability to access finance from banks and financial institutions.

			A$321m
	A$253m	A$238m		A$240m		A$230m	A$236m

A$225m				A$200m

FY12	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20

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Fortescue Metals Group Ltd Sustainability Report FY20 87

Creating positive social change

CASE STUDY

Fortescue's Billion Opportunities program reaches a new milestone

In January 2020, Fortescue announced the extension of our waste management services contract to PTK Environmental Services (PTK), an Aboriginal business owned and operated by Palyku member Tammy O'Connor, for a further five years.

The extension of the contract with PTK brings the total value of contracts and subcontracts awarded to Aboriginal businesses and joint ventures under our Billion Opportunities procurement initiative to over A$2.7 billion, since the program began in 2011.

CEO Elizabeth Gaines said, "Our Billion Opportunities program is a critical element of our commitment to provide economic and employment opportunities for Aboriginal people. We are incredibly proud to partner with over 120 Aboriginal businesses and joint venture partners and to support the growth and development of driven business leaders like Tammy O'Connor, to build capability and capacity, and contribute to the ongoing sustainability of Aboriginal companies."

PTK Director and shareholder Tammy O'Connor said, "We pride ourselves on the safe, high quality services we

provide and it is great to have this recognised by Fortescue with the extension of our contract. The flow on effect of our work with Fortescue has huge benefits for the community by providing real opportunities for people to get jobs and support their families."

COO Greg Lilleyman said, "Reducing waste through the prevention, reduction, recycling and reuse of materials produced during operations is a priority for us. We look forward to working with Tammy and the PTK team as we continue to reduce and manage our waste."

CASE STUDY

Fortescue celebrates A$20 million in funding for Aboriginal businesses under innovative ANZ leasing facility

In May, Fortescue celebrated an important milestone in its commitment to Aboriginal business development, with the approval of A$20 million in financial support for nine Aboriginal contractors under the Company's guaranteed leasing facility with ANZ.

CFO Ian Wells said, "At Fortescue, we believe that strong, sustainable

Aboriginal businesses are the key to creating employment and economic opportunities for business owners, their families and communities.

"Access to capital has been identified by our Aboriginal contracting partners as a barrier to growth and through our innovative guaranteed leasing facility with ANZ, we are helping to address this challenge by providing practical tools to build long-term capability and capacity," Mr Wells said.

Among the nine recipients is the Wirlu-murra Yindjibarndi Aboriginal Corporation, whose business arm Wirlu-murra Enterprises Pty Ltd (WME) received A$5.64 million for the purchase of plant and equipment for its non-process infrastructure operations, road maintenance and resource definition contract at Solomon.

WME Director John Sandy said, "Our longstanding relationship with

Fortescue has provided significant training, employment and business development opportunities for our people, and enabled Wirlu-murra to support many of our important local community organisations.

"With the support of Fortescue and ANZ, we have been able to access finance to purchase equipment instead of hiring from an external contractor, providing us the opportunity to own assets and generate more cash flow to invest back into training and employment for our community," Mr Sandy said.

CEO Elizabeth Gaines said, "Fortescue has been working with Wirlu-murra since 2013 and we are delighted to see them grow to be one of the largest Aboriginal businesses in Australia, delivering important employment opportunities for Aboriginal people."

88 Fortescue Metals Group Ltd Sustainability Report FY20

CASE STUDY

Iron Bridge project supports Aboriginal businesses

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Our longstanding commitment to supporting local and Aboriginal businesses continued this year with the contract for the West Canning Basin earthworks at the Iron Bridge project awarded to Cundaline Resources Pty Ltd (Cundaline).

Cundaline, a 100 per cent Aboriginal owned company with links to the Njamal, Tjiwari, Bunjima and Noongar Traditional Custodian groups, will carry out the earthworks, access preparation and rehabilitation services associated with the hydrogeology drilling program for the Iron Bridge project.

CEO Elizabeth Gaines said, "Fortescue's Aboriginal procurement initiative, Billion Opportunities, has awarded over A$2.7 billion in contracts and subcontracts to Aboriginal businesses and joint venture partners since the program began in 2011.

"We are committed to building on this proud track record through our growth projects, Eliwana and Iron Bridge, which have already awarded over A$60 million in contracts to Aboriginal businesses.

"Importantly, Billion Opportunities is focused on building the capability and capacity of Aboriginal businesses, and it is very pleasing to see Cundaline,

a business which commenced operations as a labour hire company,

now expand into earthworks and mechanical maintenance contracting areas," Ms Gaines said.

Cundaline's Managing Director Brenden Taylor said, "The West Canning Basin Earthworks contract is a milestone project and the first of a number of potential opportunities on the Iron Bridge Magnetite Project for Cundaline.

"Along this journey, we have worked together with other Aboriginal businesses and I especially want to acknowledge Fortescue, through the Billion Opportunities initiative, for making a real difference for a local and Aboriginal business like Cundaline to continue to grow our capacity and capability into the future," Mr Taylor said.

Governance

with Engaging stakeholders

high Setting standards

CASE STUDY

Innovative contract for Village Services

In December 2019, Fortescue announced the award of Village Facilities Management Agreements through an innovative contract model between Sodexo Remote Sites Australia Pty Ltd (Sodexo) and three Aboriginal businesses owned by Pilbara Native Title Groups.

With a collective award value of A$150 million over three years, the contracts involve three individual unincorporated joint venture agreements with Sodexo and 100 per cent Aboriginal owned businesses Palyku Enterprises Pty Ltd, Karlka Facilities Management Pty Ltd and Kariyarra Hospitality Services Pty Ltd.

The contracts include catering, accommodation management, and lifestyle and recreation services for our Cloudbreak and Karntama villages in the Chichester Hub and Hamilton Village in Port Hedland.

CEO, Elizabeth Gaines said, "Our Aboriginal procurement initiative and approach to providing opportunities to Aboriginal people has empowered our Native Title Partners by building

the capability and capacity of Aboriginal businesses.

"These contracts are awarded on merit. Each of our business partners has competitively demonstrated their commercial ability to deliver the contracted services and by working within a joint venture, the Aboriginal businesses have the support and opportunity to increase their active participation and build long term sustainability," Ms Gaines said.

Sodexo Chief Executive Officer of Energy and Resources Asia-Pacific Darren Hedley said, "Our ongoing work with Fortescue shows that both companies are aligned in improving the quality of village life, and value strong engagement with communities."

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Fortescue Metals Group Ltd Sustainability Report FY20 89

Creating positive social change

Creating employment opportunities for Aboriginal people

OBJECTIVE

Train, employ and develop AboriginalObjectivepeople within Fortescue and our contracting partners.

TARGET

By 2020, achieve an Aboriginal employment rate of 20 per cent across Fortescue's Australian operations
By 2020, achieve an Aboriginal employment rate of 10 per cent in leadership roles
By 2022, achieve an Aboriginal employment rate of 20 per cent in skilled trades.

844	10%	23%
Aboriginal	Aboriginal	Of Aboriginal
employees in	employment rate	employees in
Australia		trade roles

Fortescue is committed to creating opportunities for Aboriginal people by providing training, employment and development pathways.

We are proud to be one of Australia's largest employers of Aboriginal people, directly employing 844 Aboriginal people, representing 10 per cent of our Australian workforce.

Training and employment programs

Our Aboriginal training, professional development and support programs are designed to assist Aboriginal people to gain employment and progress their career with Fortescue.

90 Fortescue Metals Group Ltd Sustainability Report FY20

Vocational Training and Employment Centre

Our VTEC has been providing sustainable career pathways for Aboriginal people for over a decade. Built on the compelling idea that following the completion of training you are guaranteed employment, the program is a key part of our training and development strategy.

During FY20, 53 graduates completed the program and secured full-time employment. The recent cohort of graduates commenced employment in various roles at our Solomon Hub, Cloudbreak mine and Port Operations. Since its inception in 2006, the program has resulted in the successful employment of over 900 Aboriginal people across our sites.

Trade Up Apprentice Program

Fortescue's Trade Up, is an award-winning initiative which provides a pathway to an apprenticeship for Aboriginal employees. The program currently has 122 participants with nine participants from the inaugural intake successfully gaining permanent employment with

us during FY20. The program is supported by our contracting partners Thiess, Goodline and Eastern Guruma, Wirlu-Murra Yindjibarndi Joint Venture.

Our Aboriginal training and employment programs are complemented by initiatives designed to overcome the barriers faced by Aboriginal people in securing and maintaining work. We employ a full time health coordinator and implement an Aboriginal Health Program which aims to improve the health of our Aboriginal workforce.

We strive to build a workplace which understands, supports and champions Aboriginal people through the following:

Compulsory cross-cultural awareness training for all employees
Ensuring leaders are provided with the skills and knowledge to support and lead Aboriginal employees
Recognising and rewarding employees who support Aboriginal employment and development
Celebrating significant Aboriginal cultural events throughout the year, including NAIDOC Week.

Development pathways

Leadership and Excellence in Aboriginal People Program

We believe Aboriginal leaders are critical to enabling a culture that truly supports Aboriginal people. We provide a range of professional development opportunities to help Aboriginal employees with leadership aspirations realise their goals. A key component of this is our Leadership and Excellence in Aboriginal People (LEAP) Program.

Since its inception in 2015, our LEAP Program has provided 71 Aboriginal employees with a 12 month formal training program which includes off-site education, practical on-site development, internal mentoring, Board exposure, Aboriginal leadership education and business leadership training. Of the 71 people who have completed the program, 59 per cent have been promoted, with 50 per cent supervising others.

Supporting our Aboriginal employees and their families

We are the only Pilbara-based mining company with flights between all mine sites and the major communities of Karratha, Port Hedland, Broome, Kununurra and Fitzroy Crossing. This allows Aboriginal people to remain on country with their families while still accessing employment opportunities.

In FY20, all Pilbara-based employees were eligible to receive housing support and entitlements. Currently, 243 Aboriginal employees are accessing our owned and leased properties. To support our Pilbara based Aboriginal employees, we spent approximately A$8.8 million during FY20 on housing support.

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Fortescue Metals Group Ltd Sustainability Report FY20 91

Creating positive social change

Creating employment opportunities for Aboriginal people

Target

Progress

SDGs

844 Aboriginal people employed
By 2020, achieve an • 10% of our total Australian workforce

Aboriginal employment	•	732 Aboriginal people working on our Pilbara sites
rate of 20% across our		(including labour hire)
Australian operations	•	Four per cent of leadership roles held by Aboriginal
		people

	•	53 people completed VTEC training in FY20
Build skills, capability	•	141 Trade Up Program trainees were employed
	during FY20
and opportunities
•	49% of Trade Up Program participants were

		Aboriginal

	•	Key initiatives:
		- Trade Up Program
Create a workplace		- CEO for a Day Program
	-	Leadership and Excellence in Aboriginal People
that supports and
		(LEAP) Program
encourages Aboriginal
	-	Regional FIFO
employment and
	-	Cultural awareness training of all employees
promotion
	-	Aboriginal development team support

		-	Housing support

Provide opportunities for Aboriginal employees to participate in the LEAP Program and CEO for a Day

Deliver family support options including family site visits

- Aboriginal health programs
18 Aboriginal employees participated in the LEAP Program in FY20
71 Aboriginal employees have participated in the program since 2015
Three Aboriginal employees participated in the CEO for a Day Program in FY20
744 families hosted at our sites during FY20:
- 45 Hedland Operations
- 207 Cloudbreak
- 206 Christmas Creek
- 286 Solomon Hub

• The following community-based programs were
	supported during FY20:
	- Big hART
Provide and support	- Jawun Program
community based	- Hedland Women's Refuge
family programs	- Community Support Grants
	-	Youth Indigenous Council Mingle Mob
	- Pilbara Community Hockey Program
	- Roebourne High School Working Busy Bee

•	The following contributions to policy debate were
Annual involvement	made during FY20:
-	Partner of a research project on Indigenous
in the policy debate
	preferential procurement policies with
to address Aboriginal
	University of Melbourne
disparity
-	Initiated the establishment of the Raising the Bar

project with the Business Council of Australia

92 Fortescue Metals Group Ltd Sustainability Report FY20

CASE STUDY

Fortescue's VTEC celebrates 900th job for Aboriginal people

In 2020, we celebrated the 900th Aboriginal person to be offered full time employment with the VTEC program.

After successfully completing the program in Karratha and Port Hedland, the 17 graduates secured full time employment at our Solomon Hub, Cloudbreak mine and Port Operations in roles spanning drill and blast, dewatering, Ore Processing Facilities (OPF) and production.

Hedland VTEC graduate, Cynthia Cameron-Turland was one of the graduates.

"VTEC helped my father build a successful career as a Rail Shunter and he encouraged me to also sign up," Ms Cameron-Turland said.

Cynthia's father, Chris Turland said, "After I completed VTEC, I started off as a truck driver and 12 months later I progressed into a trainee train driver role. From there I went into train driving and rail shunting.

I haven't looked back since.

"Three generations of my family have worked at Fortescue including my mother, sisters and now my daughter

Cynthia who I'm so proud of. My son is finishing school soon and he's also looking at getting an apprenticeship through the program," Mr Turland said.

CEO Elizabeth Gaines said,

"The Turland family's achievements demonstrate the power of economic opportunity through training and employment, and the sustainability of Fortescue's VTEC program. VTEC was established in 2006 to drive real economic and generational change in the regions where we operate by providing training and employment pathways. We remain committed to adapting the program to ensure its growth and relevancy," Ms Gaines said.

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CASE STUDY

Celebrating our first Trade Up graduates

Fortescue's innovative Aboriginal apprenticeship program, Trade Up, celebrated the graduation of its inaugural cohort of participants in December 2019.

Established in 2015, Trade Up provides Aboriginal and female team members with an accredited pathway to an apprenticeship and sustainable career development in collaboration with key contracting partners. There are currently

122 participants completing the training.

At a ceremony in December 2019, nine participants from the inaugural intake joined 15 other apprentices in celebrating the completion of their apprenticeship and successfully gaining permanent employment with Fortescue.

Speaking at the graduation, Fortescue Founder and Chairman Dr Andrew Forrest AO said, "From the outset, it has been our vision to help break down the social barriers that prohibit so many Aboriginal people from gaining employment.

"Trade Up builds on Fortescue's pioneering VTEC program which provides a guaranteed job after training, giving Aboriginal team members the motivation and confidence to stand on their own two feet and this can be truly life changing," Dr Forrest said.

CEO Elizabeth Gaines said, "Training is at the heart of everything we do, as it is the building block to driving sustainable change in people's lives, careers and communities.

"With women making up 25 per cent of participants in the Trade Up Program, we are particularly proud to be building a pipeline of women ready to pursue a trades career and contribute to the success of Australia's mining industry.

"We would like to thank our contracting partners for helping to ensure the success of the program, providing opportunities to work in a range of businesses and trades. Together, we have set a new benchmark for industry led Aboriginal apprenticeship schemes," Ms Gaines said.

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CASE STUDY

Our CEO for a Day inspires with passion and commitment

Passion for his job and a commitment to improving the outcomes of Aboriginal people through employment earned Jeromy Harvey the opportunity to join CEO, Elizabeth Gaines for the release of our December 2019 quarterly production report.

Now in its fifth year, Fortescue's CEO for a Day program provides aspiring Aboriginal leaders the opportunity to join the CLT to experience how the business operates at the highest levels.

A Kija man from Kununurra, Jeromy began his journey with Fortescue in 2018 with Fortescue's VTEC team in Port Hedland and Karratha before being seconded as Aboriginal Development Manager.

"It was an honour to be selected as CEO for a Day as I believe it is a marvellous initiative that takes our Aboriginal development programs to the next level, by encouraging Aboriginal leadership within the business," Mr Harvey said.

"Joining Fortescue's VTEC team has been a rewarding experience, allowing me to not only assist Aboriginal people secure employment with the business but to also be a part of the personal journeys of these men and women."

CEO Elizabeth Gaines said, "We believe Aboriginal leaders are critical to ensuring a culture that truly supports Aboriginal people. We are delighted to be providing programs that support ambitious

team members in their leadership aspirations."

Jeromy credits our Values of family and empowerment with enabling the business to achieve positive outcomes for Aboriginal team members. "I like the 'can do' attitude at Fortescue and the encouragement to empower yourself to make decisions. It is the Value of family and looking out for our mates that underpins the success of Fortescue's VTEC and Aboriginal development programs," he said.

In February 2020, Jeromy was promoted to Manager, Aboriginal Development.

CASE STUDY

New digital technology program for Pilbara schools

In FY20, we were involved in developing a resources technology program for Pilbara school students.

Since Term 1, 2020, selected Year 5 and 6 classes in the Pilbara started learning robotics, coding and automation skills during the Digital Technologies pilot program.

With technology continuing to rapidly evolve, the program is designed to ensure students are

equipped with the digital technology skills required for future employment opportunities.

The program was officially launched at the Department of Education's Innovation Showcase during the Resources Technology Showcase in Perth.

We have helped to fund and develop the Resources Challenges: Automation program through the Pilbara Collaboration Charter, signed by the Premier of Western Australia

and the Chamber of Minerals and Energy, alongside other industry members BHP, Chevron Australia, CITIC Pacific Mining, Rio Tinto Iron Ore, Roy Hill, Woodside and Yara Pilbara.

The project has involved the support of the WA State Government and the Australian Computer Academy. If the pilot program proves successful, it has the potential to be rolled out more widely across WA schools.

94 Fortescue Metals Group Ltd Sustainability Report FY20

Supporting Aboriginal education initiatives

ProgramProgressSDGs

	We have supported the delivery of the Up4lt program for
Up4lt	the past 10 years. The program aims to attract students
back to school and reward those with good attendance in

	remote communities

Graduate and	The structured program is designed for Aboriginal
secondary school and university graduates. Students are
undergraduate
employed for two years and given exposure to a range of
program
our departments

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Fortescue's Vacation Program

The Girls Academy

Aboriginal university students are supported in completing work experience during their school holidays

In FY19, we partnered with Role Models and Leaders Australia to provide financial support for the Girls Academy. In FY20, we continued our financial support for the program and provided A$150,000 in funding

The Academy develops and empowers Aboriginal girls through leadership, mentoring, sport and extracurricular programs, enabling them to realise their full potential

Governance

with Engaging stakeholders

Supporting Science, Technology, Engineering and Maths

Fortescue recognises the growing importance of Science, Technology, Engineering and Maths (STEM) education and invests in a variety of initiatives which encourage the uptake of STEM subjects in schools and universities, with a focus on those which promote diversity including:

Australian Resources and Energy Group (AMMA) Bright Future STEM Primary School Program
Pilbara Resources Technology Program
Perth Modern School's Mechatronics Engineering Scholarship
China-AustraliaUniversity tour
Teach Learn Grow: Rural Program, Nullagine Primary School
Vacation and graduate recruitment fair.

We support youth education initiatives which empower and champion Aboriginal children

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Building sustainable communities

OBJECTIVE

Create economic opportunities in the regions in which we operateObjectivethrough engagement with local businesses and local employment, and build a residential workforce.

TARGET

Annually, achieve at least five per cent of actual spend with local Pilbara suppliers.

Fortescue strives to create economic opportunities within the regions in which we operate by employing local people and purchasing local products and services

We support a regional FIFO workforce from Port Hedland, Broome, Fitzroy Crossing, Kununurra and Karratha, with 681 employees based in the Pilbara, 415 of whom receive housing support.

We recognise the need to create vibrant and thriving communities that will attract and retain a mining workforce and their families. We seek regular feedback from our residential workforce and other stakeholders, including local governments and businesses to ensure our initiatives

and programs support and address the challenges facing these communities.

Local procurement

We are committed to ensuring the ongoing support and use of local businesses that in turn employ local people. In FY20, 2,173 suppliers were engaged with a total contestable spend of A$6.1 billion (GST inclusive). Over 95 per cent of our total procurement spend was with Australian businesses and entities.

Of this, 63 per cent was within Western Australia and 6 per cent directly in the Pilbara.

In FY20, our overseas spend was

A$76.5 million with 21 entities based in the United States of America, A$57.4 million spend with 16 Chinese suppliers, A$92.9 million with four entities based in the Netherlands and A$46.8 million with other international suppliers.

96 Fortescue Metals Group Ltd Sustainability Report FY20

Our social investment

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OBJECTIVEObjective

Deliver value to our communities through strategic community investment.

TARGET

Allocate funding according to priorities set in the community investment strategy.

A$6.6m

Social investment in our communities

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Our social investment framework

Voluntary social investment programs form a critical part of our commitment to build vibrant and thriving communities. Our programs are guided by our Social Investment Framework which ensures investment is aligned with business objectives, our Sustainability Strategy and the SDGs.

Our social investment initiatives aim to build sustainable communities and deliver long-term sustainable economic and social benefits through engagement, collaboration and the support of initiatives that address community issues across four specific areas.

Health and wellness

Education and development Environmental responsibility Arts and culture

Initiatives that improve	Initiatives that improve
health, safety and	education and reduce
wellness	inequality for Aboriginal
	people and those that
	improve gender equality

Initiatives that address biodiversity conservation, climate action and water

Initiatives that promote culture and provide access to the arts for regional communities

Voluntary social investment is additional to the implementation of our specific employment and business initiatives, Native Title payments, the payment of taxes and the delivery of goods and services.

We invest in a number of initiatives and programs, some of which are summarised below.

Our social investment

How we invest

Who we invest with

Our progress

Community partnerships

We currently invest in 15 partnerships within the Pilbara region:

Youth Involvement Council
Hedland Women's Refuge
Roebourne District High School
Town of Port Hedland
Hedland Senior High School
Young Indigenous Art and Writers Program
South Hedland Swans Football Club
Hockey Australia: Pilbara Community Hockey Program
Hedland Clontarf Academy
Teach Learn Grow Program: Rural Program
Big hART
Earbus Foundation
Port Hedland Chamber of Commerce Business of the Year Awards
Pilbara 4 Purpose Community Service Excellence Awards
Fortescue Community BBQ Trailer
Black Swan State Theatre Company

We also have well established partnerships with:

Ronald McDonald House Charities
Royal Flying Doctor Service
Salvation Army
The Big Issue
Rugby WA

During FY20, we contributed

A$1.97 million

towards these partnerships

98 Fortescue Metals Group Ltd Sustainability Report FY20

Our social investment continued

How we invest	Who we invest with	Our progress

Operating Overview review financial and

	The Fortescue Community Grants Program is open
	to eligible applicants that support community
Community	initiatives within the council boundaries of:
• Town of Port Hedland
grants
•	City of Karratha

	•	Shire of Ashburton
	•	Shire of East Pilbara

During FY20,

we provided 61 community grants totalling

A$159,000

Since its inception, a

total of A$2,170,730 has been awarded through this program

approach Our sustainability

Corporate

In-kind contributions

Our provision of in-kind contributions involves the donation of goods and services within local and remote communities.

In FY20, contributions included:

Hedland Senior High School Breakfast Program
Roebourne Senior High School Busy Bee
Jigalong Community School Busy Bee
Minderoo Fire Fund
A dedicated team in Australia and China who worked directly with Minderoo to procure lifesaving equipment and supplies, to contain the spread of COVID-19
Partnered with Minderoo to procure and distribute lifesaving medical equipment and supplies during the COVID-19 pandemic

During FY20,

we provided over A$760,000 worth of in-kind donations

We have provided in-kind contributions to the value of A$114,000 in WA

33 of our employees were seconded to help rebuild communities impacted by the fires in the eastern states. This makes up part of a A$610,000 in-kind contribution towards the work of the Minderoo Fire Fund

Governance

with Engaging stakeholders

Setting standards

Employee contributions

Red Cross Disaster Relief

With matched giving from Minderoo Foundation (Minderoo), Fortescue employees donated A$249,700 to the Red Cross' Disaster Relief and Recovery Fund during FY20 to assist those directly impacted by Australia's bushfires.

COVID-19 gift vouchers

In March 2020, Fortescue families were gifted a Coles voucher to help support them through the challenges of the COVID-19 pandemic. 671 employees chose to donate these vouchers to one of our three preferred charities. These donations saw A$20,100 gifted to Ronald McDonald House Charities (RMH), the Hedland Women's Refuge and the Salvation Army.

Ronald McDonald House Charities

Our partnership with RMH was established in 2012 and has resulted in employees directly contributing over A$1 million to the charity through a variety of fundraising activities, sponsorship of major events and volunteering contributions. We continue to foster a strong partnership with RMH, which provides emergency accommodation to regional families with children requiring medical treatment in Perth.

In November 2019, Fortescue took part in the RMH's major fundraising event 'Up All Night', a 42-kilometre overnight walking marathon. 35 team members stepped up to the challenge and raised over A$70,000, which was generously matched by Dr Andrew Forrest AO and Nicola Forrest AO, resulting in a total donation of A$143,000 to RMH.

Community Grants Program

Operating for 12 years, our Community Grants Program provides funding

for local organisations, projects and programs in Pilbara communities. Grants of up to A$5,000 are available for eligible projects that support community initiatives within the council boundaries of the Town of Port Hedland, City of Karratha, Shire of Ashburton and Shire of East Pilbara.

During FY20, we awarded community grants totalling over A$159,000 to

61 local community organisations, sporting clubs and non-profit groups. The deadline for the second round of applications for our Community Grants Program was extended to accommodate organisations and projects affected by the COVID-19 pandemic.

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Community partnerships

We continue to invest in community partnerships and during FY20

we partnered with the following organisations:

Town of Port Hedland

We have a longstanding partnership with the Town of Port Hedland and work collaboratively to achieve their vision of creating a vibrant and flourishing place for people to live and work.

Through this partnership, our employees and their immediate family members are eligible to access some of the Town of Port Hedland's recreational facilities, and we provide support to various community facilities and events delivered by the Town of Port Hedland, including the sponsorship of the North-West Festival, a weekend-long major music concert showcasing both established Australian music talent and local artists.

Youth Involvement Council Mingle Mob

We are proud of our ongoing support of the Youth Involvement Council's (YIC) outreach program Mingle Mob in South Hedland. Mingle Mob aims to improve social behaviour in the community and enhances the future of our next generations. The program takes at risk youth from the streets to a safe shelter.

Hedland Women's Refuge

We are a long-term supporter of the Hedland Women's Refuge which provides crisis accommodation and holistic programs to women and children escaping family and domestic violence.

In 2016, we entered into a five year partnership with the Refuge which includes direct operational funding and opportunities to assist through numerous activities including the upgrade of the refuge's outdoor facility.

We stand together with the refuge in recognition of the need to eliminate family violence in communities.

Through our representation on the Hedland Family Violence Action Group we also support the annual 'Hedland Says No to Family Violence' community march.

During FY20, our Projects team donated an additional A$15,000 to the refuge from their Great Days safety campaign.

Roebourne District

High School

Now in its eighth year, the annual Roebourne District High School Busy Bee brings together our employees, contractors and business partners to create a positive learning environment for children and staff at the school. This event demonstrates our long-term commitment to communities in the Pilbara with a focus on practical initiatives.

Hedland Senior High School

Fortescue has a strong relationship with Hedland Senior High School (HSHS) and we continue to support the strategic direction and programs being delivered in the school

to enhance the education and opportunities for the students and Hedland community.

We provide students with a pathway to employment in the mining industry through a range of traineeships and apprenticeship programs. In FY20, we offered work placement opportunities at our Hedland Operations, engaged six graduate students in traineeship positions and placed four students from Clontarf in school-based traineeships.

Each Friday during the school term, our employees work together to give students at the school a cooked hot breakfast and fruit for the day.

Young Indigenous Art and Writers Program

We continued our support for the coordination and delivery of the Young Indigenous Art and Writers Program in the Pilbara. The program aims to build literacy and numeracy skills that provide pathways to higher education or employment, develop confidence and self-esteem, teach creativity, increase school attendance levels and address the broader issue of child suicide rates in remote communities.

In FY20, the program was delivered to 13 schools across the Pilbara, including several remote community schools.

CASE STUDY

Keeping the RFDS flying during the COVID-19 pandemic

In April 2020, Fortescue donated A$1 million to the Royal Flying Doctor Service (RFDS) Western Operations to help boost the organisation's frontline services during the COVID-19 pandemic.

The donation supported the Response Ready for WA appeal, which will ensure the RFDS has the necessary resources, infrastructure, capital and people to safely deliver its range of 24/7 emergency aeromedical and essential primary healthcare services for remote and regional West Australians.

CEO, Elizabeth Gaines said, "We are pleased to provide this donation to support the RFDS to provide this vital service for people living in remote and regional WA. As

a business operating in regional WA, we want to ensure our local communities continue to have access to critical services. We

sincerely thank all the RFDS staff, medical workers, doctors and nurses who are on the front line of this war against COVID-19 and are working tirelessly to ensure West Australian lives are saved."

RFDS Western Australia CEO Rebecca Tomkinson said, "The response to, and recovery from, COVID-19 will be a critical, ongoing team effort. We are all in this together. With support from Fortescue and the resources and business sector, the RFDS can meet the needs of remote and regional Western Australia during this unprecedented time and well into the future."

100 Fortescue Metals Group Ltd Sustainability Report FY20

CASE STUDY

Keeping Aboriginal communities safe during the COVID-19 pandemic

Over 1,300 care packages containing essential supplies were distributed to Aboriginal communities in the Pilbara, as part of Fortescue's response to the COVID-19 pandemic.

With the support of Woollahra, SureKleen, Action Industrial Catering and Sodexo, 29 pallets of non-perishable foods and critical hygiene products, including flour, tinned meat, soap and disinfectants, were picked up by representatives of Aboriginal communities in Port Hedland, Karratha and Roebourne.

Ronald McDonald House Charities

Our partnership with RMH was established in 2012. In FY20, we maintained support for the RMH Adopt-A-Room program by sponsoring two rooms for the year which kept 72 families close to their seriously ill children for 616 nights while their child received the medical care they needed.

South Hedland Swans Football Club

We continue to support several sport and recreation focused initiatives that deliver benefits to Pilbara communities, the largest of which is as major sponsor of the South Hedland Swans Australian Rules Football Club. The sponsorship has recently expanded to include the female team, the South Hedland Swanettes.

Rugby WA

We have a longstanding partnership with rugby union in Western Australia and are the Naming Rights Partner of the RugbyWA senior rugby competition. The Fortescue Premier Grade is the highest level of competition for club rugby union in Western Australia and our sponsorship helps to build a

CEO Elizabeth Gaines said. "We are acutely aware of the risks of COVID-19 to regional and remote Aboriginal communities and are working proactively with a range of stakeholders to ensure they are supported during and after this global health crisis. These critical items will help empower Aboriginal communities to take the necessary steps to prevent an outbreak of COVID-19 and we will continue to work with our Native Title Partners to keep providing these targeted support measures in the months to come".

We are also working closely with our Aboriginal business partners to

talent pool of players and provide a pathway to the Western Force while supporting the efforts of community volunteers and sportspeople.

Hedland Clontarf Academy

In FY20, we announced a new three year A$225,000 commitment to the Clontarf Foundation. Their Academy aims to assist young Aboriginal and Torres Strait Islander men with their education, discipline, life skills and employment opportunities. The Academy has been embraced by Hedland Senior High School and 125 students aged between 12 to 18 years currently participate in the program.

Teach Learn Grow: Rural Program

In FY20, we continued our financial and in-kind support towards the delivery of the Teach Learn Grow Rural Program. The program

is delivered twice a year at the Nullagine Primary School and provides students with tailored tutoring in numeracy and STEM education and access to mentoring support throughout the year. The program aims to build resilience, self-confidence, inspire educational goals and improve attitudes towards learning at school while increasing attendance rates.

ensure they remain resilient through the COVID-19 pandemic.

"We know the ongoing impact of COVID-19 will be challenging for many Aboriginal businesses and we are helping to address the specific issues they may be facing, while continuing to engage their services. We are also proactively working to ensure that our Aboriginal suppliers are part of Fortescue's ongoing procurement strategy to secure supplies and services needed to contain the spread of COVID-19, including medical supplies, hand sanitisers, cleaning and hygiene products," Ms Gaines said.

Earbus Foundation of Western Australia

Fortescue continued to fund Qantas flights for the Earbus Foundation of Western Australia to facilitate specialists visiting the Pilbara to deliver ear health services to regional and remote communities. The Pilbara Earbus visits schools and playgroups in Port Hedland as well as remote communities including Marble Bar, Nullagine, Strelley, Warralong and Yandeyarra

in partnership with Wirraka Maya Aboriginal Health Service.

In FY20, we also provided funding to purchase portable hearing technology for use in remote communities.

Our community BBQ trailer

Our community BBQ trailer is available at no charge to eligible community, non-profit and sporting organisations based in Port Hedland to assist with fundraising and community events. The trailer is fully equipped with a slide out BBQ, fold out fridges, TV screen, speaker system and storage space. We provide all BBQ ingredients and materials, as well as volunteers to support events.

In FY20, the Community BBQ Trailer assisted 29 groups to raise much needed funds towards initiatives within the Port Hedland community.

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CASE STUDY

Supporting the Minderoo Fire Fund in helping families recover from the bushfires

In FY20, we provided over

A$600,000 of in-kind assistance to support Minderoo in helping families recover from the bushfires.

The Minderoo Fire Fund has been established with the aim of rebuilding communities and developing a long term blueprint for wildlife and disaster resilience.

33 Fortescue employees were seconded to the program and helped to install Fire Fund Recovery Pods, a form of temporary accommodation.

These pods were installed in communities recovering from the bushfires, providing a much needed source of emergency housing.

Temporary housing has been identified as one of the most urgent needs in disaster situations, and the pods provide immediate access to shelter, water and electricity for affected families.

CASE STUDY

Supporting Ronald

McDonald House

Charities Online

Learning Centre

This year, we supported RMH's Work of Heart program to provide 20 digital tablets to families and children, enabling the continued delivery of educational programs and services to families during the COVID-19 pandemic.

The Work of Heart program aims to bring children together and

create extraordinary experiences through education and fun and creative therapy. The purpose of providing tablets was to ensure families remain connected and to allow for the continued delivery of educational programs while maintaining social distancing. Educational sessions in the learning

centre were temporarily suspended during the COVID-19 pandemic.

Due to physical distancing measures, it is difficult for families to form bonds. Through the use of technology and coordinated activities, RMH can ensure strong community bonds are still formed within the house.

CASE STUDY

Our partnership with Black Swan State Theatre Company

In November 2019, we announced a three year partnership with Black Swan State Theatre Company

to the value of A$1 million which will help bring the best of West Australian theatre to the regions.

CEO, Elizabeth Gaines said the partnership builds on our longstanding commitment to communities. "From the outset, it was our vision to ensure that the

communities in which we operate thrive and we have been proud to support many West Australian initiatives and organisations.

"Fortescue and Black Swan are both strong West Australian brands with a shared ambition for our State and a dedication to building vibrant communities across the State. With so many of our team members working and living in regional WA, we are particularly pleased with the

regional focus of our partnership which will bring the excitement and storytelling of theatre to our regions," Ms Gaines said.

Through this partnership, we are working with Black Swan Theatre to provide online theatre, public speaking and engagement opportunities for our employees and the wider community during the COVID-19 pandemic.

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CASE STUDY

Extending our Big hART partnership

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We extended our support for Big hART in FY20, with a new A$300,000 three year partnership to support the delivery of workshops for young people living in Roebourne.

Established 27 years ago, Big hART is a not-for-profit organisation delivering social change programs through arts and digital media. The organisation has worked on the ground with the Roebourne community for nine years.

Together with the Wirlu-murra Yindjibarndi Aboriginal Corporation, Fortescue has partnered with

Big hART since 2017 to support the delivery of Aboriginal youth workshops for children living in Roebourne. The program focuses on community safety, increasing digital inclusion, generational change, connection to culture and engagement in education.

CEO Elizabeth Gaines said, "We are committed to developing

partnerships and initiatives to deliver positive outcomes for Aboriginal communities in the Pilbara. We support Big hART's vision of driving positive, generational change in communities, which strongly aligns with our approach to empowering Aboriginal people through the provision of training, employment and business development opportunities."

Governance Corporate

with Engaging stakeholders

CASE STUDY

Continuing our decade long Hockey Australia sponsorship

high Setting standards

During FY20, we announced an extension of our long-term sponsorship of Australia's national men's and women's hockey teams, bringing the duration

of our commitment to the sport to a decade. The two year, A$1 million agreement commenced in August 2019.

The agreement encompasses the highly successful Fortescue Hockey Community Program, which provides Aboriginal students in the Pilbara with the opportunity

to engage in hockey and increase their engagement and attendance at school. The program has grown from an initial pilot at Roebourne Primary School to now include 10 schools in Karratha and Port Hedland.

CEO Elizabeth Gaines said the Fortescue family is pleased to continue our longstanding commitment to the Australian national hockey teams.

"In line with our commitment to diversity, we are proud to support one of the most gender equal sports

in Australia with our sponsorship contributing to pay parity for male and female athletes and to continue increasing the games' footprint throughout the Pilbara," Ms Gaines said.

Hockey Australia CEO, Matt Favier said, "Fortescue's incredible support enables the Kookaburras and Hockeyroos to compete among the world's best and continue to be regarded as two of Australia's most successful and highly ranked national teams."

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Human rights

Fortescue is committed to respecting and promoting the human rights of all people including our employees, the communities in which we operate, those who may be impacted by our activities and those within our supply chains.

We conduct business in a manner consistent with the human rights principles encompassed in the Universal Declaration on Human Rights, the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work, the United Nations Global Compact, the Forced Labor Convention and the United Nations Guiding Principles on Business and Human Rights.

Our Human Rights Policy and Code of Conduct and Integrity form the foundation documents for human rights protection across Fortescue. Specific policies and guidelines ensure the highest standards are achieved.

We ensure the protection of human rights including by:

Actively communicating our approach and expectations to all stakeholders including suppliers

Engaging with stakeholders to understand the impacts of our activities and working with them to optimise benefits and limit negative impacts
Undertaking ongoing due diligence to identify, prevent and mitigate the adverse impacts of our activities, capturing outputs in our corporate risk register
Providing access to remedy through effective grievance mechanisms
Seeking to secure the consent of Traditional Custodians to mineral exploration and development on their traditional lands
Considering human rights in our sourcing and purchasing decision processes and promoting our expectations via contract clauses
Participating in engagement sessions related to human rights policy and regulatory development.

Potential human rights risks are identified and assessed within our company wide Risk Management Framework. This framework ensures consideration of potential human rights risks by senior management and the Board. Our ARMC is responsible for oversight of risk management (including human rights risks) on behalf of the Board.

We also undertake in-country risk assessments before investing in any country to ensure the level of human rights risk, including the risk of modern slavery, is well understood.

Our human rights assessments have identified the key risks as protecting the health and safety of employees and contractors, addressing modern slavery in the supply chain and protecting the rights of Aboriginal people and communities near our operations.

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Modern slavery

Fortescue opposes all forms of slavery in its operations and the operations of our suppliers.

We are committed to identifying, assessing and mitigating human rights impacts, providing access to remedy through effective grievance mechanisms, and ensuring continuous improvement to strengthen our actions. We work in collaboration with our suppliers to eradicate modern slavery from our supply chain.

Key actions undertaken during FY20 include:

Revision of our Modern Slavery Strategy, an internal guidance document that outlines the processes and procedures to identify and address the impacts of modern slavery within our company

Development and implementation of a supplier risk assessment matrix which rates suppliers against four criteria to identify those at a higher risk of contributing to, or being directly linked to, modern slavery practices
Completion of Self-Assessment Questionnaires (SAQ) by all higher risk suppliers
Undertaking independent audits of two key international suppliers
Provision of ongoing modern slavery training for relevant employees.

The eradication of modern slavery requires a collaborative approach where government, business, civil society and the wider community works together to address this issue. During FY20, we continued to work with the following groups to achieve

this joint goal:

Global Compact Network Australia (GCNA)
Corporate Business Integrity Council
Bali Process Government and Business Forum
Department of Home Affairs
Walk Free Foundation.

This year, we released our third modern slavery statement, the first required under Australia's Modern Slavery Act 2018 (Cth).

Our FY20 Modern Slavery Statement is available on our website at www.fmgl.com.au

The Board approved statement outlines the actions we have taken to assess and address modern slavery risks in our business and supply chain.

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CASE STUDY

Joining industry led initiatives to help end modern slavery

with

high Setting standards

In FY20, we joined a group of

10 mining, energy and resource companies from Western Australia to develop a practical toolkit to pre-screen for modern slavery risks within our supply chains.

Recognising that suppliers are facing growing information requests due to modern slavery legislation, the toolkit provides a SAQ that asks suppliers to identify modern slavery risks and the work they are undertaking to address these risks. The common set of questions will streamline reporting and provide consistency and clarity.

CEO Elizabeth Gaines said Fortescue opposes all forms of slavery and forced labour across our operations and the operations of our suppliers.

"As an industry, we have a significant role to play in addressing the risks of modern slavery in our supply chains and believe a coordinated approach between government, businesses, civil society and the community

is crucial to eradicating modern slavery," Ms Gaines said.

"Modern slavery has been a key focus for us for a number of years and significantly it was the strong advocacy from business, most

notably from our Chairman and Founder Dr Andrew Forrest AO, that led to the introduction of Australia's Modern Slavery Act."

By working together, the industry group aims to help end modern slavery and advance the United Nations Sustainable Development Goal 8 to 'promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all'.

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Navigational Index

Fortescue's Sustainability Report contains Standard Disclosures from the Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines, and the associated Mining and Metals Sector Supplement.

The FY20 Sustainability Report also serves as our Active Level Communications on Progress for the United Nations

Global Compact. The Navigation Index indicates the sections of Fortescue's FY20 Sustainability Report, FY20 Annual Report, FY20 Climate Change Report, FY20 Modern Slavery Statement and FY20 Corporate Governance Statement that align with the GRI Standards, the principles of the United Nations Global Compact and the 10 principles of the International Council on Mining and Metals.

review financial and	operating Overview
sustainability	Our

General Standard Disclosures

GRI	Disclosure	Location	ICMM	UNGC
Standard	Principles	Principles
102-1	Name of the organisation	About this report: page 2

102-2	Significant indirect	Building sustainable communities:
economic impacts	pages 96-103


102-3	Location of headquarters	About Fortescue: page 7
Full address: page 121


102-4	Location of operations	About Fortescue: page 7

		About Fortescue: page 7
102-5	Ownership and legal form	Annual Report - Shareholder information:
		page 156

102-6	Markets served	About Fortescue: page 7

102-9	Supply chain	Local procurement: page 96

102-10	Significant changes to the	FY20 Annual Report - Financial Report-
organisation and supply chain	Director's Report: pages 64-66


102-11	Precautionary Principle or	Protecting biodiversity: pages 71-73	1,2,4	7
approach


		Message from CEO: pages 5-6
		Our approach to Sustainability: pages
102-12	External initiatives	24-25	2
Memberships and commitments

		to external initiatives relevant to
		sustainability: pages 37-38

102-13	Memberships	Memberships and commitments: page 38	2

102-14	Statement from senior decision	Message from CEO: pages 5-6	2	1,4,5
	maker
102-15	Key impacts, risks and	Material issues: page 26
opportunities	Throughout the report


102-16	Values, principles, standards	Vision and values: Inside cover	1,2	10
and norms of behaviours	Throughout the report


102-18	Governance structure	Corporate Governance: page 31	1

102-32	Highest governance body's role	Corporate Governance: page 31
Respecting Human Rights: pages 104-105	1
	in sustainability reporting	FY20 Climate Change Report

	to approach
	Governance Corporate
stakeholders	with Engaging
standards	high Setting
environment	Safeguarding
	the
positive Creating change social
	Directory Corporate

Fortescue Metals Group Ltd Sustainability Report FY20 107

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General Standard Disclosures

GRI	Disclosure	Location	ICMM	UNGC
Standard	Principles	Principles
102-40	List of stakeholder groups	Engaging with stakeholders: pages 33-36	4,10

102-41	Collective bargaining	Fortescue family: page 48	3	3
agreements

102-42	Identifying and selecting	Engaging with stakeholders: pages 33-36	4,10
stakeholders


102-43	Approach to stakeholder	Engaging with stakeholders: pages 33-36	4,10
engagement


102-45	Entities included in the	FY20 Annual Report - Notes to the
consolidated financial	Consolidated financial statement:
	statements	pages 78-116

102-46	Defining report content and its	Our approach to sustainability:	2
boundary	pages 24-25


		Material issues: pages 26 - 29
102-47	List of material topics	Materiality assessment: page 26	2
United Nations Sustainable Development

		Goals: page 25

102-48	Restatements of information	Restatements of information are noted in
the text


102-49	Changes in reporting	Our approach to sustainability:
pages 24-25

102-50	Reporting period	About this report: page 2	10

102-51	Date of most recent report	2020

102-52	Reporting cycle	About this report: page 2

102-53	Contact point for questions	About this report: page 2
regarding the report


102-54	Claims reporting in accordance	About this report: page 2
	with GRI standards

102-56	External Assurance	About this report: page 2	10
Management approach

103-1	Explanation of the material	Covered for each material issue
throughout the report.	4,10
topic and its boundary
	Material issues: page 26


103-2	The management approach and	Covered for each material issue
throughout the report.
	its components	Material issues: page 26


103-3	Evaluation of the management	Covered for each material issue
throughout the report.
approach
	Material issues: page 26

Economic performance

201-1	Direct economic value	Total global economic contribution:
page 62	9
generated and distributed
	Approach to tax: pages 63-67


201-2	Financial implications and other
risks and opportunities due to	FY20 Climate Change Report	6	7
	climate change

108 Fortescue Metals Group Ltd Sustainability Report FY20

Specific Standard Disclosures

GRI	Disclosure	Location	ICMM	UNGC
Standard	Principles	Principles
Material topic: Employee health, safety and wellbeing
Occupational Health and Safety

DMA	Disclosure on management	Employee health, safety and wellbeing:
approach	pages 40-47


	Types of injury and rates of
403-2	injury, occupational diseases,	Employee health, safety and wellbeing:
lost days, absenteeism,	pages 40-47	5	1
	and number of work-related	Data tables: pages 113-115
	fatalities
Material topic: Diversity
Diversity and equal opportunity

DMA	Disclosure on management	Workplace diversity: pages 50-56
approach


405-1	Diversity of governance bodies	Workplace diversity: pages 50-56	3	6
and employees


Employee training and education

404-1	Average hours of training per	Data tables: page 115	5	6
year per employee


	Percentage of employees
404-3	receiving regular performance	Data tables: page 115	5	6
and career development

	reviews

Employment

401-1	Total number and rates of new
employee hires and employee	Data tables: page 115	3	6
	turnover

	Benefits provided to full-time
401-2	employees that are	Our Fortescue family: pages 48-49		6
not provided to temporary or

	part-time employees

	Operations with significant and	Engaging with our stakeholders:
413-2	potential negative impacts on	pages 33-36	3,9	1,2
Building sustainable communities:
	local communities
	pages 96-103

Material topic: Ethical conduct, anti-bribery and corruption
Anti-corruption

DMA	Disclosure on management	Ethical conduct, anti-bribery and
approach	corruption: pages 60-61


205-3	Confirmed incidents of	Ethical conduct, anti-bribery and	1	10
corruption and actions taken	corruption: pages 60-61

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Specific Standard Disclosures

GRI	Disclosure	Location	ICMM	UNGC
Standard	Principles	Principles
Material topic: Protecting Aboriginal heritage
Rights of Indigenous peoples

DMA	Disclosure on management	Preserving Aboriginal heritage:
approach	pages 57-59


	Total number of operations taking
	place in or adjacent to Indigenous
G4-MM5	peoples' territories, and number	Preserving Aboriginal heritage:
and percentage of operations	3,9	1,2
pages 57-59
	or sites where there are formal

	agreements with Indigenous
	peoples' communities
411-1	Incidents of violations involving	Preserving Aboriginal heritage:	3,10	1,2
rights of Indigenous peoples	pages 57-59

Material topic: Building local communities
Indirect economic impacts

DMA	Disclosure on management	Building sustainable communities:
approach	pages 96-103


203-2	Significant indirect economic	Building sustainable communities:
impacts	pages 96-103


Procurement practices

204-1	Proportion of spending on local	Building sustainable communities:	2,9	6
suppliers	page 96

Material topic: Respecting human rights
Human rights assessment

DMA	Disclosure on management	Respecting human rights: pages
approach	104-105


412-1	Operations that have been subject	Respecting human rights: pages
to human rights reviews or impact	3	1,2
104-105
	assessments


	Employee training on human rights	Respecting human rights: pages
412-2	104-105	3	1,2,3,4,5,6
policies and procedures	FY20 Modern Slavery Statement


	Significant investment agreements	Respecting human rights: pages
412-3	and contracts that include human
104-105		1,2,3,4,5,6
rights clauses or that underwent

human rights screening	FY20 Modern Slavery Statement

110 Fortescue Metals Group Ltd Sustainability Report FY20

Specific Standard Disclosures

GRI	Disclosure	Location	ICMM	UNGC
Standard	Principles	Principles
Supplier environmental assessment
Supplier environmental assessment

308-1	New suppliers that were screened	FY20 Modern Slavery Statement	6	7,8,9
using environmental criteria


Child labour

408-1	Operations and suppliers at
significant risk for incidents of	FY20 Modern Slavery Statement	3	1,2,5
	child labour

Forced or compulsory labour

409-1	Operations and suppliers at
significant risk for incidents of	FY20 Modern Slavery Statement	3	1,2,4,5
	child labour
Material issue: Protecting the environment
Biodiversity

	Operational sites owned, leased,
304-1	managed in, or adjacent to,
protected areas and areas of	Protecting biodiversity: pages 71-73	7	8
	high biodiversity value outside
	protected areas

	Amount of land (owned or leased,
G4-MM1	and managed for production	Data tables: page 116	6	8
activities or extractive use) disturbed
	and rehabilitated

	The number and percentage of
	total sites identified as requiring
G4-MM2	biodiversity management plans	Protecting biodiversity: pages 71-73	7	8
according to stated criteria, and the

	number (percentage) of those sites
	with plans in place
304-2	Significant impacts of activities,
products and services on	Protecting biodiversity: pages 71-73	7	8
	biodiversity
304-3	Habitats protected or restored	Protecting biodiversity: pages 71-73	7	8

	IUCN Red Listed Species and
304-4	national conservation list species	Protecting biodiversity: pages 71-73	7	8
with habitats in areas affected

	by operations

Closure planning

G4-MM10	Number and percentage or	Closure and rehabilitation: page 79	6,9	7
operations with closure plans

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Specific Standard Disclosures

GRI	Disclosure	Location	ICMM	UNGC
Standard	Principles	Principles
Material issue: Protecting the environment

Water

303-1	Interactions with water as a shared	Sustainable water management:	6	7,8
resource	pages 74-78


303-2	Management of water discharge-	Sustainable water management:	6	7,8
related impacts	pages 74-78


303-3	Water withdrawal by source	Data tables: page 116	6	7,8

303-4	Water discharge by category	Data tables: page 116	6	7,8

303-2	Water recycled and reused	Data tables: page 116		8

Material Topic: Climate Change

DMA	Disclosure on management	FY20 Climate Change Report
approach


305-1	Direct (Scope 1) GHG emissions	FY20 Climate Change Report	6	8

305-2	Energy indirect (Scope 2) GHG	FY20 Climate Change Report	6	8
emissions


305-4	GHG emissions intensity	FY20 Climate Change Report	6	8

305-5	Reduction of GHG emissions	FY20 Climate Change Report	6	8

112 Fortescue Metals Group Ltd Sustainability Report FY20

Data tables

Health and Safety data
Fatalities by region			FY20	FY19	FY18	FY17
Australia			0	0	0	0
China			0	0	0	0
South America			0	0	0	0
Other International			0	0	0	0
Total			0	0	0	0
Safety Excellence and Culture Survey	96	93	94	92
participation (%)

Positive drugs test results (%)		0.5	0.8	0.6	0.5

TRIFR
	FY20	FY20	FY20	FY19	FY18	FY17
Region	Total	Contractor	Employee	Total	Total	Total
Australia	2.3	2.7	1.9	2.8	3.7	2.9
China	0	0	0	0	0	0
South America	6.0	5.7	6.0	3.7	0	0
Other International	0	0	0	0	0	0
Company wide	2.4	2.7	1.9	2.8	3.7	2.9

Injury Severity Rate
		FY20	FY20	FY20	FY19	FY19
Region		Total	Employee	Contractor	Employee	Contractor
Australia		67	53	80	83	132
China		0	0	0	0	0
South America		31	42	0	80	0
Other international		0	0	0	0	0
Company wide		67	52	79	79	132

Recordable occupational illness rate of FY20

		FY20	FY20	FY19	FY19
Region		Employee	Contractor	Employee	Contractor
Australia		0.1	0.1	0.2	0.1
China		0	0	0	0
South America		0	0	0	0
Other international	0	0	0	0
Total		0.1	0.1	0.2	0.1

Regional safety fines
		FY20	FY20 Value	FY19	FY19 Value
Region		Fines	(A$)	Fines	(A$)
Australia		0	0	1	$64,000
International		0	0	0	0

Employment data
Number of staff	by	gender and	FY20	FY19	FY18
(employees and labour hire)

Male			6,858	5,438	4,749
Female			1,650	1,312	1,002
Total			8,508	6,750	5,751
Number of staff	by employment type (employees	FY20	FY19	FY18
and labour hire)

Full time			6,180	4,756	3,953
Part time			414	454	347
Fixed term full time		220	148	174
Fixed term part time		10	2	5
Casual			131	146	46
Labour hire			1,553	1,244	1,226
Total			8,508	6,750	5,751

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Data tables

Employment data

Flexible working arrangements		FY20	FY19	FY18

Number of staff that utilised flexible working		438	463	360
arrangements

Number of staff	by employment category		Female		Male
(employees only)
FY20	FY19	FY20	FY19

CEO		1	1	0	0

GM and above		13	11	40	35

Managers		49	31	147	114

Superintendents		58	49	259	191

Supervisor		44	32	449	373

Other (professionals, operators, trades,	1,175	941	4,720	3,728
support staff)

Total		1,340	1,065	5,615	4,441

Number of staff by region (employees and labour hire)

Australia	1,521	1,204	6,631	5,244

China	13	8	14	10

Singapore	8	7	5	5

Ecuador/Colombia	87	79	167	154

Argentina	19	14	39	25

Portugal	2	-	2	-

Total	1,650	1,312	6,858	5,438

Number of staff by employment type		FY20	FY19	FY18
(employees and labour hire)

Females working in the Perth Office (%)		38	39	24

Aboriginal people working on Pilbara sites		14	15	22
(%)

Age distribution (employees and labour hire)		FY20	FY19	FY18

<30 Male		1,288	1,018	883

<30 Female		469	390	273

31-50 Male		4,122	3,264	2,865

31-50 Female		960	747	587

51+ Male		1,448	1,156	1,001

51+ Female		221	175	142

Total		8,508	6,750	5,751

Females in management positions (%)		FY20	FY19	FY18

Females in senior leadership positions		26	26	24

Females in management positions		25	22	22

Board membership		FY20	FY19	FY18

Male		5	4	4

Female		4	5	5

114 Fortescue Metals Group Ltd Sustainability Report FY20

Data tables

Employment data

Aboriginal employment data (employees and labour hire)	FY20	FY19	FY18

Employees - Male	616	573	607

Employees - Female	228	206	203

Total	844	779	810

Aboriginal people working across all sites

Number of Aboriginal people working across all sites	844	1,070	1,161
(incl. contractors)

Employees who are Aboriginal (%)	10	12	14
(direct employees and labour hire)

Employee turnover

Voluntary turnover (%)	8	9	11

Involuntary turnover (%)	2	2	2

Total	10	11	13

Voluntary turnover by gender (direct employees only)

Male (%)	8	10	10

Female (%)	10	11	12

Parental leave

Employees who took primary carers parental leave	123	114	95

Primary carers parental leave retention rate (%)	94	88	-

Employees eligible for parental leave (%)	71	76	88

Female employees who took primary carers parental leave	92	91	82

Employees receiving regular performance and career development reviews (%)

Male	100	100	100

Female	100	100	100

Total hours by gender

Male	138,875	325,235	146,222

Female	23,052	40,368	23,881

Total hours of training by employee type

Permanent full time	149,621	164,190	154,437

Fixed term	6,056	4,511	4,222

Part time	6,250	14,597	11,415

Health and Safety training in hours by gender

Male employees	25,404	24,703	19,303

Female employees	4,155	3,298	2,426

Male contractors	67,653	40,246	51,156

Female contractors	8,097	3,023	4,780

New employee hires by gender (direct)

Male employees	1,824	1,256	603

Female employees	464	396	155

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Data tables

Native Title and heritage

	FY20	FY19	FY18

Number of reportable heritage incidents	0	0	0

Number of heritage places managed	5,933	5,902	5,597

Land ethnographically surveyed (ha)	198,798	219,894	202,575

Land archaeologically surveyed (ha)	2,659,264	2,357,549	2,095,346

Number of Land Access Agreements in	7	7	7
place


Environment and water
Land	FY20	FY19	FY18

Total land disturbed (ha)	32,202	28,973	27,304

Total land rehabilitated (ha)	3,523	4,232	4,008


Air
	FY20	FY19	FY18

Total NOx emissions (metric tonnes)	14,347	-	-

Total SOx emissions (metric tonnes)	200	-	-

Total particulate emissions (metric tonnes)	79,980	-	-


Water withdrawn by source (kL)
	FY20	FY19	FY18

Surface water withdrawal	0	0	0

Groundwater withdrawal	169,181,067	136,266,801	142,292,710

Seawater withdrawal	558,472	541,621	530,992

Surface water withdrawal in areas with water stress	-	-	-

Groundwater withdrawal in areas with water stress	-	-	-

Rainwater collected/stored	0	0	0

Municipal water supplies, other public or private water	20,089	21,875	17,658
utilities

Water sources significantly affected by withdrawal of water	0	0	0

Third party	-	-	-


Water Returns to the environment (kL)
	FY20	FY19	FY18

Managed aquifer recharge	111,888,995	95,826,877	91,679,678

Surface water withdrawal	0	0	0

Supplementation	3,547,636	2,417,352	2,907,454

Evaporation and seepage	1,082,015	1,076,840	988,258

Third party	-	-	-

TSF decant return	1,095,368	-	-

Managed aquifer recharge in areas with water stress	-	-	-

Surface water discharge in areas with water stress	-	-	-

Number of significant environmental incidents	0	0	0

116 Fortescue Metals Group Ltd Sustainability Report FY20

Data tables

Water use (kL)

	FY20	FY19	FY18

Ore processing facilities	35,328,610	33,470,287	31,820,491

Potable camp supply	1,329,003	817,728	1,124,400

Dust suppression	8,800,450	8,789,361	7,036,979


Waste
	FY20	FY19	FY18

Total waste (tonnes)	27,589	25,259	13,513

Material recycled (%)	89	91	86

Material landfilled (%)	11	9	14


Tailings
	FY20	FY19	FY18

Total tailings (dry metric tonnes)	25,766,916	22,566,064	21,375,094

Taxes paid
	FY20	FY19	FY18
Company taxes (A$ million)	2,922	1,669	381

Royalties (A$ million)	1,285	823	529

Foreign (A$ million)	14	13	12

Total (A$ million)	4,221	2,505	1,182

Salaries and benefits (A$ million)
	FY20	FY19	FY18

Total salaries (A$million)	1,074	767.6	693.7

Total superannuation (A$million)	104	79.7	71.4

Amount of housing support (A$milion)	15	11	11

Total (A$million)	1,193	940	776.1

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Glossary

Aboriginal

Those who identify themselves as Australian Aboriginal and/or Torres Strait Islander.

Aboriginal employment rate

The number of permanent, fixed term (full-time and part-time), and labour hire Aboriginal and Torres Strait Islander employees who work in Australia, as

a percentage of the total number of permanent, fixed term (full-time and part- time), and labour hire employees who work in Australia. Calculated using data as of 30 June 2020.

Aboriginal employees in trade roles

The number of permanent, fixed term (full-time and part-time), and labour hire, Aboriginal and Torres Strait Islander employees in roles defined internally as apprentice, trades, trades specialist or track maintenance, who work in Australia, as a percentage of the total number of permanent and fixed term (full-time and part-time) employees in roles defined internally as apprentice, trades, trades specialist or track maintenance. Calculated using data as of 30 June 2020.

Aboriginal owned businesses

A business with equal to or greater than 50 per cent ownership by an entity registered as an Aboriginal Corporation by the Office of the Registrar of Indigenous Corporations, a member of a registered Native Title Group, a member of the Aboriginal Chamber of Commerce and Industry, a Supply Nation Registered and Certified Supplier or a member of the Indigenous Land and Sea Council.

Aboriginal people employed

Total number of permanent, fixed term (full-time and part-time), and labour hire Aboriginal and Torres Strait Islander employees as at 30 June 2020.

Absentee rate

The number of absence days Australian employees accessed for personal leave (paid and unpaid), compassionate leave, or absent without leave as a percentage of their overall days rostered to work during FY20.

AMMA

Australian Resources and Energy Group.

ASX

Australian Securities Exchange.

ASX Corporate Governance Principles and Recommendations (4th Edition)

Principles and recommendations developed and released by the ASX Corporate Governance Council on the corporate governance practices to be adopted by ASX listed entities and which are designed to promote investor confidence and to assist listed entities to meet shareholder expectations.

Board Membership

Members of Fortescue's Board of Directors, who are elected in accordance with Fortescue's Constitution and the Corporations Act 2001 (Cth).

Billion tonnes.

Chichester Hub

Fortescue's mining hub with two operating iron ore mines, Cloudbreak and Christmas Creek, located in the Pilbara, approximately 250 kilometres south east of Fortescue's Herb Elliott Port in Port Hedland.

CLT

Fortescue's Core Leadership Team.

CME

Chamber of Minerals and Energy.

Contestable spend

Spend (includes VAT/GST) that is subject to Fortescue's procurement processes and managed in accordance with Fortescue's Procurement Policy. It excludes shipping costs, government costs or charges (including royalties), donations, subscriptions and memberships, Native Title Group payments (other than payments made for the provision of direct goods

or services), property leasing, related Fortescue entities and legal fees.

Contractors

Non-Fortescue employees, working with the Company to support specific business activities. Excludes those classified as labour hire.

Corporations Act

Corporations Act 2001 of the

Commonwealth of Australia.

Direct employees

Total number of permanent and fixed term (full-time and part-time) employees. Does not include labour hire or contractors.

dmt

Dry metric tonne.

EBITDA

EBITDA is defined as earnings before interest, tax, depreciation and amortisation, exploration, development and other expenses.

EBITDA margin

EBITDA/Operating sales revenue.

Employee contributions

Financial contributions donated by Fortescue employees.

Employee turnover (voluntary)

The number of voluntary exits through resignations of permanent and fixed term (full-time and part-time) employees as a percentage of the average headcount for FY20

Employee turnover (involuntary)

The number of involuntary exits through dismissals of permanent and fixed term (full-time and part-time) employees as a percentage of the average headcount for FY20.

The chemical symbol for iron.

Female employment rate

The number of female permanent, fixed term (full-time and part-time), and labour hire employees who work across Fortescue's Australian and international sites, as a percentage of the total number of permanent, fixed term and labour hire employees. Calculated using data as of 30 June 2020.

Female employment rate in manager and above roles

The number of female, permanent and fixed term (full-time and part-time) employees, in roles defined as supervisor and above who work across Fortescue's Australian and international sites, as a percentage of the total number of permanent and fixed term employees. This does not include labour hire employees. Calculated using data as of 30 June 2020.

Female employment rate in senior leadership roles

The number of female, permanent and fixed term (full-time and part-time) employees, in roles defined as group/general manager and above who work across Fortescue's Australian and international sites, as

a percentage of the total number of permanent and fixed term employees. This does not include labour hire employees. Calculated using data as of 30 June 2020.

118 Fortescue Metals Group Ltd Sustainability Report FY20

FIFO

Fly-inFly-out, defined as circumstances of work where the place of work is sufficiently isolated from the worker's place of residence to make daily commute impractical and workers are flown for their shift to the workplace.

Flexible working arrangements

Number of Fortescue employees in Australia utilising casual, part time or job share work arrangements. It does not include labour hire. Requests for flexible working arrangements are in accordance with the Fair Work Act 2009 (Cth).

Fortescue

Fortescue Metals Group Ltd

(ACN 002 594 872) and its subsidiaries.

Financial Year.

Gigajoules.

Gigalitre.

GRI

Global Reporting Initiative. GRI is an independent international organisation which provides companies with a framework to advance their sustainability agenda. The GRI Standards are a global best practice for reporting on economic, environmental and social impacts.

Hectares.

Hematite

An iron ore compound with an average iron content of between 57% and 63% Fe. Hematite deposits are typically large, close to the surface and mined via open pits.

ICMM

The International Council on Mining and Metals, established in 2001 to act as a catalyst for performance improvement in the mining and metals industry.

In-kind contributions

Donation of product, property and services by Fortescue, which include employee time volunteering, secondments, use of Company equipment and facilities as well as the donation of products.

Indigenous Land Use Agreement (ILUA)

Statutory agreement between a Native Title Group and others about the use of land and waters.

IUCN

International Union for Conservation of Nature.

Kilolitre.

Land archaeologically surveyed

The area of land surveyed archaeologically across Fortescue's Western Australian tenement portfolio during FY20, measured in hectares. The survey is undertaken

by traditional land owners and a cultural heritage professional.

Land ethnographically surveyed

The area of land ethnographically surveyed across Fortescue's Western Australian tenement portfolio during FY20, measured in hectares. The survey is undertaken

by traditional land owners and a cultural heritage professional.

Labour hire employees

Contractors backfilling permanent Fortescue roles and employed through selected recurring external labour hire agencies.

Leadership roles held by

Aboriginal people

The number of permanent and fixed term (full-time and part-time) Aboriginal and Torres Strait Islander employees in roles defined as supervisor and above who work in Australia, as a percentage of the total number of permanent and fixed term employees in roles defined as supervisor and above who work in Australia. This does not include labour hire employees. Calculated using data as of 30 June 2020.

Local supplier

Suppliers whose head office is located in the Pilbara region of Western Australia as defined by postcode. In cases where the work is performed in the Pilbara but the supplier's head office is located outside of the Pilbara, an analysis is undertaken to determine the percentage of spend attributed to the Pilbara.

Cubic metres.

Magnetite

An iron ore compound that is typically a lower iron content than hematite iron ore. Magnetite ore requires significant beneficiation to form a saleable concentrate. After beneficiation, magnetite ore can be palletised for direct use

as a high-grade raw material for steel production.

Material landfilled

The volume of waste sent to landfill from Fortescue's Pilbara operations, including port and rail, as a percentage of the total volume of waste generated. Waste landfilled includes putrescible, glass and wooden damaged pallets.

Material recycled

The volume of waste recycled from Fortescue's Pilbara operations, including port and rail, as a percentage of the total volume of waste generated. Waste recycled includes nonhazardous waste (including wood, rubber, aluminium, steel, batteries, cardboard and high-density polyethylene pipe) and hazardous waste (oil filters).

mtpa

Million tonnes per annum.

NTP

Native Title Partners. This refers to the Western Australian Native Title Groups and Native Title Holders with whom Fortescue has a relationship. These relationships allow the Company to undertake consultation for exploration and operations purposes. For some Native Title Partners, this relationship is established through an Indigenous Land Use Agreement, Land Access Agreement or Heritage Agreements.

Number of heritage places managed

Total number of active recorded heritage places across Fortescue's exploration and operations within Western Australia. Heritage places are managed through physical demarcation and through our geographic information system.

Number of reportable heritage incidents

Total number of reportable heritage breaches reported during FY20. Breaches are defined as offences relating to Aboriginal sites in accordance with the Aboriginal Heritage Act 1972.

Number of staff by employment category

Number of permanent and fixed term (full- time and part-time), employees across our Australian and International sites within each of the following employment categories, CEO, General Manager and above, Manager, Superintendent, Supervisor, and Other as of 30 June 2020. It does not include casual and labour hire employees.

Number of staff by region

Total number of permanent, fixed term (full-time and part-time), and labour hire employees by region, including Australia, China, Singapore, Ecuador, Colombia, Argentina and Portugal as of 30 June 2020.

OPF

Ore Processing Facility.

Parental leave

The number of permanent (full-time and part-time), employees accessing paid and unpaid primary or secondary leave in Australia during FY20.

Pilbara

The Pilbara region in the north west of Western Australia.

Scope 1

Emissions from operations owned and controlled by Fortescue within Australia. These include emissions from our mining haul fleet and the power stations operated by us.

Scope 2

Indirect emissions generated from electricity purchased by Fortescue within Australia.

Scope 3

Indirect emissions within Fortescue's value chain (excluding Scope 2), including upstream and downstream emissions.

review financial and	operating Overview
sustainability	approach Our
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stakeholders	with Engaging
standards	high Setting
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	Directory Corporate

Fortescue Metals Group Ltd Sustainability Report FY20 119

Corporate Directory

Senior Executive

Leadership position where the employee has the title of Director or Group/General Manager.

Significant environmental incidents

Incidents classified at Level 3 and above (as defined through Fortescue's Environmental Consequence Descriptors Matrix). Level 3 environmental incidents result in off-site environmental impact causing significant environmental harm.

Social investment in our communities

Our investment in philanthropic, community and commercial initiatives. These investments aim to build sustainable communities and address community issues across the areas of health, wellness, education, development, environmental responsibility, arts and culture. Includes financial (donations, grants, employee contributions, matched giving, partnerships and the cost of employee involvement), in-kind contributions (volunteering, use

of company equipment and donation of products) and management costs (community investment staff salaries and overheads).

Solomon Hub

A mining hub with two operating iron ore mines, Firetail, Kings and Queens. The Hub is located approximately 60 kilometres north of the township of Tom Price and 120 kilometres west of the railway that links the Chichester Hub to Port Hedland.

Training hours

Total training hours recorded during FY20 for permanent and fixed term (full-time and part-time) employees across all of Fortescue's Australian sites. Excludes casual and labour hire employees.

Training hours per employee

The total number of hours of training per permanent and fixed term employees (full-time and part-time) across Fortescue's Australian sites during FY20. Does not including casual employees and labour hire.

Total global economic contribution

Payments that contribute to the global economy including payments to suppliers, employees (salaries and wages), governments (taxes and royalties), shareholders and investors (dividends and debt repayments).

Total NOx emissions

The total oxides of nitrogen emissions across Fortescue's Pilbara operations, including port and rail, in FY20, measured in metric tonnes. Emissions are measured in accordance with the reporting requirements of National Environment Protection (National Pollutant Inventory) Measure 1998.

Total SOx emissions

The total sulphur dioxide emissions across Fortescue's Pilbara operations, including port and rail, in FY20, measured in metric tonnes. Emissions are measured in

accordance with the reporting requirements of National Environment Protection (National Pollutant Inventory) Measure 1998.

Total land disturbed

The total land area disturbed through clearing across Fortescue's Pilbara operations, including port and rail, in 2019 (calendar year) measured in hectares. Land disturbance is measured in accordance with reporting requirements under the Mining Act 1978.

Total land rehabilitated

The total land area rehabilitated across Fortescue's Pilbara operations, including port and rail, in 2019 (calendar year), measured in hectares. The land area rehabilitated is measured in accordance with reporting requirements under the Mining Act 1978.

Total particulate emissions

The total particulate matter (PM10) emissions across Fortescue's Pilbara operations, including port and rail, in FY20, measured in metric tonnes. PM10 are very small particles found in dust and smoke. They have a diameter of 10 micrometres (0.01mm) or smaller.

Total waste

The volume of waste generated at Fortescue's Pilbara operational sites, including port and rail, in FY20, measured in metrics tonnes, including mineralised and non-mineralised waste.

Total tailings

The total volume of fine-grainedby-product, generated through Fortescue's iron ore processing facilities at its operational sites in the Pilbara, measured in dry metric tonnes.

Total salaries

The total gross salaries paid to permanent, fixed term (full-time and part-time) Australian and international employees before taxes and deductions in FY20. Excludes salaries paid to labour hire and contractors.

Total superannuation

The total superannuation payments made to permanent or fixed term (full-time and part-time), Australian employees' nominated superannuation fund in FY20. Excludes payments to labour hire and contractors.

TRIFR

Total Recordable Injury Frequency Rate per million hours worked, comprising lost time injuries, restricted work and medical treatments.

UNGC

United Nations Global Compact, which provides a leadership platform for businesses that are committed to aligning their strategies and operations with 10 universally accepted principles in human rights, labour, environment and anti- corruption.

VTEC

Vocational Training and Employment Centre.

Water returns to the environment

Total water returns across all of Fortescue's Pilbara operational sites in FY20, measured in kilolitres. Includes water returned through managed aquifer recharge, surface water discharge, supplementation, evaporation and seepage.

Water withdrawn by source

Total water withdrawn from across all of Fortescue's Pilbara operational sites in FY20, measured in kilolitres. Includes water withdrawn from the following sources: groundwater, surface water, seawater, municipal water supplies, third party and TSF decant return.

Water use

Total water used across all of Fortescue's Pilbara operational sites in FY20, measured in kilolitres. Includes water use through ore processing facilities, potable camp supply and dust suppression.

Whistleblower cases

The total number of whistleblower cases reported through the Whistleblower Hotline in FY20.

Whistleblower Hotline

This refers to the independent, confidential and anonymous mechanism for employees, contractors and members of the community to raise concerns regarding potential illegal activity or breaches of our Code of Conduct and Integrity across all Fortescue operations. The Whistleblower Hotline Policy is aligned with the Treasury Laws Amendment Act 2019 (Cth).

wmt

Wet metric tonne.

120 Fortescue Metals Group Ltd Sustainability Report FY20

Contact details

Fortescue Australia

Level 2, 87 Adelaide Terrace East Perth, WA 6004

+61 8 6218 8888

+61 8 6218 8880

fmgl@fmgl.com.au
www.fmgl.com.au

Fortescue VTEC and

Community office

1B/2 Byass Street

South Hedland, WA 6722

+61 8 9158 5800

+61 8 6218 8880

hedlandcommunity@fmgl.com.au

vtec@fmgl.com.au

Australian Business

Number

ABN 57 002 594 872

Auditor

PwC

Level 15, 125 St Georges Terrace Perth, WA 6000 www.pwc.com.au

Securities Exchange listings

Fortescue Metals Group Limited shares are listed on the Australian Securities Exchange (ASX)

ASX Code: FMG

Fortescue Share Registry

Link Market Services Limited

Level 12, QV1 Building

250 St Georges Terrace

Perth, WA 6000

Locked Bag A14

Sydney South, NSW 1235

1300 733 136 (within Australia)

+61 2 8280 7603 (International)

+61 2 9287 0309 www.linkmarketservices.com.au

Fortescue Shanghai, China

Unit 3, Floor 15 No. 1366 Lujiazui

Ring Road Pudong New Area

Shanghai, P.R China

Singapore

FMG International,

The Central

8 Eu Tong Sen St,

24-91 Singapore 059818

Stay in touch

Latest news, reports and presentations via email

If you would prefer to receive information such as annual reports, notices of meetings and announcements via email, you can change your communication preferences on the Registry website: www.linkmarketservices.com.au

To get in touch with any other Fortescue office, please contact reception@fmgl.com.au

Twitter

@FortescueNews

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www.youtube.com/user/

FortescueMetalsGroup

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Fortescue Metals Group Ltd. published this content on 24 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 August 2020 22:53:02 UTC

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	1st Jan change	Capi.
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VALE S.A.	-18.13%	51.61B
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