Fortescue Metals Group chief executive Neville Power will step down next year after seven years at the helm.
The company announced the leadership change on Friday, with the Mr Power slated to leave on February 16.
Iron ore to remain Fortescue’s core business
Fortescue chief executive Nev Power on his company’s earnings and peformance and his outlook on iron ore.
“This is consistent with our long-term succession plan,” chairman Andrew Forrest said in a statement.
“We could not be more pleased with his stewardship and respect his decision that it is time for the next chapter of Fortescue to begin.”
CEO Nev Power is stepping down as Fortescue CEO in February. Photo: Matt Reed
Speaking at a press conference in Perth on Friday, Mr Power said he had considered the move for some time.
“It’s time for a transition for Fortescue and me personally. There’s nothing special about the timing,” he said.
The 59-year-old said he would use the opportunity “to contemplate the future, and give a kick along to a few private business interests”, one of which includes “helping my son on the cattle station”.
In terms of a replacement, Mr Forrest declined an opportunity to narrow the field.
Chairman Andrew Forrest: “There is a really decent talent pool throughout the echelons of Fortescue.” Photo: AAP
“When we look across the company we have 8700 great candidates, so I’d be trite to say we’re going to release any details of who amongst us we will be looking at. We will also look around the world,” he said.
“There is a really decent talent pool throughout the echelons of Fortescue.
“Firstly, we’re going to be looking for character, the kind of person who can really take Fortescue’s culture forward.”
Mr Forrest has also used the change to put forward an expansion of the company beyond purely mining.
“We are going to look for and consider other opportunities where other investors can join us,” Mr Forrest said.
“I don’t see ourselves as only a mining company, I see ourselves as a great management and operating company.”
Macquarie Securities tipped Fortescue to look within its own ranks for a new chief executive.
It touted Greg Lilleyman, Fortescue’s current operations director, and the former Rio Tinto group executive for technology and innovation, as a possible replacement.
Current Fortescue CFO Elizabeth Gaines has also been mentioned as a possible successor to Mr Power. She joined the company earlier this year and has previously held roles as the CEO of travel firm Helloworld and West Australian cattle company Heytesbury.
“Lilleyman would be the favourite, and Gaines is the wildcard,” Shaw and Partners analyst Peter O’Connor said.
MineLife analyst Gavin Wendt said the announcement was a surprise but noted Mr Power had been in the role “well past the time most CEOs spend”.
“Power brought a lot of confidence to the market,” Mr Wendt said. “During his time, he helped Fortescue deliver on what they said they would.
“There’s always been scepticism on how the miner would bridge the gap between itself and the larger players like BHP and Rio Tinto, and he’s done well to do so.
“He has contributed to the evolution of the company, and been a driving force both in operational and market performance.”
Mr Power is only the second chief executive to lead the company in its 15 years of operation.
During his tenure, Fortescue cut operational costs from $US53 ($66.27) per wet metric tonne down to between $US11-12 per wet metric tonne. Mr Power has also overseen a program to rapidly lower borrowings, trimming net debt to $US2.6 billion from a peak of over $US10 billion four years ago.
Fortescue last month boosted dividends and reported full-year profit more than doubled on higher prices to $US2.1 billion ($2.7 billion).
Fortescue shares closed 4.475 per cent lower at $5.55 on Friday on a day when most mining stocks suffered.
Iron ore is seeing more downward pressure as both supply and stockpile levels increase, with forecasts for a price average of $US50 a tonne by the fourth quarter.