Transcription of Finance News Network Interview with Fortescue Metals Group Limited (ASX:FMG) founder and non-executive Chairman, Andrew Forrest Lelde Smits: Hello I'm Lelde Smits for the Finance News Network and joining me today is founder and non-executive Chairman of Fortescue Metals Group Limited
(ASX:FMG), Andrew Forrest. Andrew, welcome.
Andrew Forrest: My absolute pleasure Lelde. Thank you for bringing me on to the show and the best to all your viewers.
Lelde Smits: You stepped down as Fortescue’s CEO last year, but we are in your head-office now and to what extent are you still holding onto the reigns?
Andrew Forrest: Look, I started the company, I totally love the company. But, it’s much better off with me as a guiding chairman and having a really active executive team. They’re super talented, they’re even more committed, and they’re steering the company exactly as it should be. So for me, if they have a complaint at all they probably don’t see enough of me. But, I can assure them if they need me, I’m absolutely there. This is of course my major business investment but it is also, emotionally, I love this company. And, I will continue to guide it as long as I’m useful.
Lelde Smits: You recently boosted your stake in Fortescue, taking your holding to about a third: Why buy now and how much more do you want?
Andrew Forrest: I’m an accumulator of Fortescue shares. I think it is a real privilege to own them. I know that people get excited because you can buy them cheap or buy them more expensive. To me, this is a multi-generational investment. It is a very long term company. It has assets which are the prize of the world.
Lelde Smits: Now Andrew, we’ve both just attended the Africa Down Under conference here in Perth, are you or Fortescue looking at any investments abroad?
Andrew Forrest: Look we have for years and years. But, we’re a hugely discretionary investor. We look at assets through the lens of, can it compete with our massive projects in terms of profitability, return on equity, scale, to use our people to the best of their ability. It’s got to compete with what we do here in the Pilbara. So, while we could have made 35 different investments over the last three or four years, often the company is defined by the investments they don’t make.
Lelde Smits: Now Andrew, you’ve been a very vocal opponent of the Labor Government's Minerals Resource Rent Tax: But could you explain why you’re against a tax that is being sold to Australians as redistribution of wealth?
Andrew Forrest: Because it is a political lie. If it was that, sure, stand up and do it. But it’s nothing of the sort. The Treasurer knew it. BHP Billiton Limited
(ASX:BHP), Rio Tinto Limited
(ASX:RIO), Xstrata PLC (LON:XTA), those huge multi-national companies, they all knew it. But what got sold by the Treasurer to the Australian people is, exactly what you said, ‘This is a redistribution, this is to make it all fairer’. What a political hoax. Exactly as I’ve said for ages. For all its heat, light, dusk and smoke and promises, it hasn’t raised a cent.
Lelde Smits: Fortescue has of course lodged a challenge in the High Court of Australia against the mining tax. But Andrew, do you really believe you can and will repeal the tax or is this just an attempt to highlight your opposition to it?
Andrew Forrest: No, we think it is unconstitutional. And, we’ve already had statements from governments saying, well, we’ll legislate out the problems. Because, clearly, their lawyers are saying, ‘Hey, there could be issues here’. Now, what are they saying if they’re going to legislate out the problems? Then they’re in the same breath saying, well we must agree with Fortescue. We’re trying to ram down the throat of the Australian people something which is a) a political hoax and hasn’t raised a cent, all the companies have come out and said they’re not paying it. Fortescue has said we’re not even going to protect against it, we’re not going to pay it. But it is out there as this redistribution, completely failing its policy, yet the government is saying we may have to change it to make it constitutional. What are they saying? It is unconstitutional now.
Lelde Smits: Now Andrew, you are well known for being a very active philanthropist. Which causes are you currently promoting and why do you believe they should matter to Australians?
Andrew Forrest: Look, I am a person who believes that the greatest challenge facing Australia is the disparity between Aboriginal people and non-Aboriginal people. And, it’s not for money. We have had so many bureaucrats and politicians solving problems by throwing our precious taxation dollars at it. What’s it do? It weakens people. It creates a racism of low expectations.
Instead, if we do the harder yard and ask our Aboriginal people to fulfill their absolute ability, which they have, they can complete with every other Australian in every sense. We’ve seen it in sport of course, let me tell you intellectually, no problem either. Let’s expect them, let’s demand from our Aboriginal people, that they take the responsibility, the sentence of opportunities which we offer. Opportunity and responsibility; You have it, your listeners have it, your viewers have. Aboriginal people want it as well, and they don’t get it if we’re just throwing them money the whole time.
Lelde Smits: And do you believe Australians focus enough on philanthropy or what do you think can or should be done to promote it?
Andrew Forrest: Look, while you’ve got governments which seem to be hell-bent on taxing anything which moves, I don’t blame Australians for wanting to keep their powder dry.
In America you have this encouragement of philanthropy and encouragement of entrepreneurism and encouragement of success. Now, once we move to there, you’ll get people feeling really good about giving their success away. I of course advocate that. I support it strongly.
Australians have this unique capacity to make a difference. Combine it with a bit of capital, they can make a serious difference. Our movement against modern day slavery and forced labor is one of the most effective movements which the world has seen and it is only just started. It’s bred here in Australia from Australian philanthropy, Australian energy, yet it is impacting people all around the world now. That’s what Australians are capable of.
Lelde Smits: Andrew Forrest, thank you so much for your time today.
Andrew Forrest: My absolute pleasure, thank you so much.
Ends
