Fortescue Metals Group Ltd Telephone: + 61 8 6218 8888 · PDF fileFortescue Metals Group Ltd ACN: 002 594 872 87 Adelaide Terrace East Perth Western Australia 6004 PO Box 6915, East

Fortescue Metals Group Ltd ACN: 002 594 872 87 Adelaide Terrace East Perth Western Austral ia 6004 PO Box 6915, East Perth , Western Austral ia 6892

Telephone: + 61 8 62 18 8 888 Facsimile: + 6 1 8 621 8 88 80 Website: w w w .f mg l . c o m. a u

12 February 2008 The Companies Officer Australian Stock Exchange Ltd. Exchange Plaza 2 The Esplanade Perth WA 6000 Dear Sir,

Presentation given at BBY Australian Resources Conference Please find attached a copy of the paper presented at the BBY Australian Resources Conference this week. Yours sincerely Fortescue Metals Group Ltd Rod Campbell Company Secretary Att.

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Fortescue Metals Group LtdTHE NEW FORCE IN IRON ORE

Tra

An Australian StoryA World of Opportunity

in Unloader

FEBRUARY 2008

DISCLAIMER

Important Notice

Fortescue Metals Group Ltd

The purpose of this presentation is to provide general information about Fortescue Metals Group Ltd ("Fortescue"). It is not recommended that any person makes any investment decision in relation to Fortescue based on this presentation.

This presentation contains certain statements which may constitute "forward-looking statements". Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward-looking statements.

No representation or warranty, express or implied, is made by Fortescue that the material contained in this presentation willbe achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of Fortescue, its officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this presentation and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission therefrom. Fortescue accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person nor any obligation to furnish the person with any further information.

Level 2, 87 Adelaide TerraceEast Perth, Western Australia 6004

www.fmgl.com.au

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From 2003 to 2008

• The Vision

• Team Work

• FOOS – 15 MAY 2008

From ConceptFortescue Mine Site - 2004

Fortescue Mine Site - 2008

To Reality

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Executive Summary

Fortescue’s perfect timing – Strongest markets for decades

• Demand driving commodity prices and growth ambitions• Demand driving commodity prices and growth ambitions

• Credit and Equity markets have large appetite for Iron Ore / China exposure

Fortescue is set to become one of the world’s leading iron ore companies

• Significant reserves and resources with strong exploration upside

• World class asset expected to be in the bottom decile of the cost curve

• Strong off-take partners want more

• Project at aggregated 78 complete and FOOS scheduled for mid May 2008

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The - isations are Driving Chinese Steel DemandSteel Consumption & GDP per capita, 1965 - 2005

Source: ANZ

Actual & Project Chinese Iron Ore Imports

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Chinese Imports by Source

70.00%

80.00%Infrastructure constraints limit Australian response leading to falling market share

China Requires that Australia Recover Market Share

20 00%

30.00%

40.00%

50.00%

60.00%

Aust

Brazil

India

S.Africa

Others

est

Source: Tex Report; FMG

0.00%

10.00%

20.00%

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

China needs the Pilbara

• Australia is the most competitive supplier to Asia

• Three companies globally set price and dominate the seaborne market

• Fortescue plans to be the 4th major seaborne supplierFortescue plans to be the 4 major seaborne supplier

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Fortescue will meet the challenge

Open Access Infrastructure

• Initially built to support Chichester Range Project

• Easy expansion• Easy expansion

Aggressive expansion plans

• 0 to 55mtpa – FOOS: May 2008

• 55 to 100mtpa – target 2009/2010

• 100 to 200mtpa

• As much, as soon as possible

Fortescue: not missing the boat to China

Marketing – Sold Out

• Base Production Target – “Sold Out”

• First Stage Expansion to 100 Mta already CommittedFirst Stage Expansion to 100 Mta already Committed

• Long Term Relationships with Key Chinese Mills

• Technical Focus on Product Performance Traits

• Chemical and physical properties of product well tested and understood

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Significant Project Liquidity

3,000

3,500Millions(AUD)

Cost Over-run & Back-up Reserve

Infrastructure Contingency

Mining & Working Capital

F.O.O.S.18/05/2008

1,500

2,000

2,500

Infrastructure Costs

Actual / Forecast

0

500

1,000

Mar-06

Apr-06

May-06

Jun-06

Jul-06 Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07 Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

FMG Pilbara Holdings Dwarfs Others

FMG – 40,000 sq. km, Rio – 11,000 sq. km, BHP – 7,000 sq. km

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• One of the largest bedrock hosted iron ore discoveries in Australia

• Ore reserves of 1.1 Bt, including proved ore reserves of 120 Mt, providing sufficient ore for approximately 20 year mine life at 45Mtpa

• New resources being added through aggressive exploration programme

Unparalleled Assets – Significant Reserves & Resources

1000

1500

2000

2500

3000

3500

mill

ion

tonn

es

New resources being added through aggressive exploration programme

0

500

Chi

ches

ter R

ange

Solo

mon

Pro

ject

Yand

i (BH

PB)

Bung

aroo

Ck

Yand

icoo

gina

(Rio

)

Area

C

Wes

t Ang

elas

Broc

kman

4

Mar

ando

o re

gion

Mt W

hale

back

Hop

e D

owns

Nam

mul

di /

Broc

kman

2

Tom

Pric

e

OB2

9/30

Mes

a J

Jim

bleb

ar (W

4)

OB1

8

East

ern

Ran

ges

Para

burd

oo

OB2

5/23

Mt J

acks

on /

Win

darli

ng

Cha

nnar

Kool

yano

bbin

g

Note:- Total resources are exclusive of total reserves- Data derived or calculated from best available company, technical and government public report

Ore Body Characteristics

• Free digging over burden low cost removal

Unparalleled Assets – Shallow & Extensive Ore Body

• Mineralisation gently undulating - typical dip at 2° to 5°• Mineralised thickness varies between 3 metres and 20 metres• Multiple mining faces facilitate high productivity and blending flexibility

Target IntervalSouth North

Footwall BIF + shales

Ore horizon Hardcap and detritals

Alluvial Overburden

20 METRES

UP TO 4,000 METRES Down Dip

Microplaty Hematite

* Vertical exaggeration over 10 x

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60Australian mines

Unparalleled Assets – Competitive Cost

0

10

20

30

40

50

0 200 400 600 800 1000

US c

ents

/dm

tu FMG mineBrazilian mines

0 200 400 600 800 1000

Cumulative Production (mn wmt)

CRU forecast Fortescue to be bottom decile on industry cost curves in 2008The price of Iron Ore is linked to the high production cost of Magnetite

(1) Site Operating Costs are those costs used to determine free cashflow and include raw material costs and conversion costs.

Source: CRU Strategies, July 2006.

Iron Ore Fines Site Cost Curve1) 2008

Innovation & Functionality

Surface Miners deliver efficiencies and cost competitiveness

• Enhanced grade control

• No drill and blast in ore zone

• No primary crushing

Hi h l ti• Higher lump ratio

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Fortescue Port Footprint – 5km

First of 14 Surface Miners at work

Fortescue Port Footprint 5km

Surface Miners in First Commercial Pit

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Existing Project –60mtpaFirst Ore on Ship March 2008

2 Loading Berths1 Ship loader3.2mt stockpileSingle loop1 x 2 car train unloader Lump circuit

1Km

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Port Hedland Port Operations

100mtpaAnderson Point

Port Expansion to 100mtpa

3 berths6.5mt stockpileDouble loop2x 2 car train unloaders

1Km

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200+mtpaAnderson Point

Port Expansion to 200+mtpa

6 x Cape size + 1 x Panamax berth)4 x Rail Loop4 x Train Unloader200+Mtpa stock yardy

07_038_0521_COR

Existing Project Locations

EAST PILBARA PRODUCTION HUB

WEST PILBARA PRODUCTION HUB

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Latest Project Highlights• New Surface Miners outstrip expectations

• First Ore On Ship (FOOS) expected mid May 2008

• Port at ~ 90% complete, mine at ~ 84%, and rail at ~ 83% p , ,

Permanent Camp – Cloudbreak Mine

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Cloudbreak Airport Open –Three Charter Flights Per Week To Mine Site

Mine Construction on Schedule

Crushing & Screening

Pl tPlants

Train Loading Vault

Rail Terminal

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Screening Plant

Ore Conveyors

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Crushing Plant

Stockpiles

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Train Loading Vault

Train Loader

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Rail

Total Rail Line Cleared (260 kms)

Rail earthworks on eight separate construction fronts and all bridges advanced

Automated Track Laying Machine

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East Turner Bridge Complete

Crossing Over BHPB Rail Track

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Rail Marshalling Yard

Rail Supplied By Panzhihua Steel

15 GE Locos Arrive at Port Hedland

The first 5 of 15 FMG locomotives fresh from test building ready for track testing.

Locomotives On Stands

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State of the Art Ore Cars

Wharf and Shiploader

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Train Unloader at Port Stockyard

Stacker & Reclaimer

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The New Force

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