Fortescue is facing the prospect of a $500 million hit to its bottom line
The ASX mining share may need to pay a large amount to the traditional owners of the land surrounding the Solomon project mining hub
The iron ore miner and energy business also released its quarterly update this week
The Fortescue Metals Group Ltd (ASX: FMG) share price suffered a drop of 5.4% on Friday amid news that it is potentially facing a $500 million bill.
Fortescue is one of Australia’s largest iron ore ASX shares and may have to pay a significant settlement to the Yindjibarndi people, the traditional owners of the land where it mines.
This follows a Federal Court decision that found the Yindjibarndi people had exclusive native title over about 75% of Fortescue’s Solomon Hub in Western Australia.
What’s happening?
According to reporting by the Sydney Morning Herald, the Yindjibarndi Ngurra Aboriginal Corporation has asked the Federal Court to determine the compensation, with a figure of $500 million rported as the possible amount.
Fortescue Metals CEO Fiona Hick has indicated that the ASX mining share is ready to settle. Hick said (as reported by SMH):
We’re certainly working to resolve the matter, and we would like it resolved as quickly as possible and preferably outside the court.
Yindjibarndi testimony is due to start in the second week of August in Pilbara.
Yindjibarndi country
Earlier this year, the Federal Court heard from two senior Yindjibarndi women.
As reported by The Guardian, Yindjibarndi elder Tootsie Daniel said at the time:
When I looked at that country it was so beautiful, with wildflowers, it took my breath away. It opened our hearts and the old people started singing corroboree songs. It was like the country welcomed us, the spirit of the land, our ngurra (country).
I humbled myself, it brought tears to my eyes it was so beautiful. Now, looking at that same country breaks my heart, it’s all barren because of that mining.
The Guardian noted that many Yindjbarndi people were forced to move off country to the Two Mile Reserve, near Roebourne, in the early to mid-1900s.
Said Daniel:
We want to move back to country, that’s what we fight for, but our homelands is where they remove iron ore and take it to other countries and that is wrong.
Our country has been disturbed and our hearts are broken.
What else could be affecting the Fortescue share price?
Fortescue announced record iron numbers for FY23 in its fourth quarter update released this week. The miner also reported its expectations for C1 costs and iron ore shipments in FY24. They indicate potential growth of iron ore shipments, but mainly due to the inclusion of Iron Bridge production.
Investors may have been hoping for more shipments from the company.
The miner also advised it was continuing to develop its green energy segment. The boss of this segment, Mark Hutchinson, is aiming for Fortescue to make five final investment decisions this year. This includes a project it just acqired in Arizona that will supply 12,000 tonnes of green hydrogen per year, according to reporting by the SMH.
Another potential contender to be the first to go ahead may be the green ammonia production planned at the Gibson Island plant near Brisbane, owned by Incitec Pivot Ltd (ASX: IPL).
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