I would now like to hand the conference over to Mr. Dino Otranto, CEO, Metals and Operations. Please go ahead.
Hello everyone, and thanks for joining us. Joining me today is Gus Pichot, Fortescue Growth and Energy CEO, and Apple Paget, CFO. We are also joined today by Brodie Mitchell through our CEO for the Quarter program. This gives emerging leaders the chance to step up into the room with our leadership team, see how decisions are made, and understand the business from a completely different perspective. A Malgana and Nyamal man, Brodie joined Fortescue in 2023 and is one of our health specialists. He has more than a decade experience across healthcare, rehabilitation, and corporate health. More recently, Brodie did some great work improving our pre-employment medical process to better identify and manage health risks on-site. Brodie, it is great to have you with us, mate. Welcome.
Thanks, Dino. Appreciate being here.
As we announced at our quarterly update a few weeks ago, we shipped a record 201.3 million tonnes for the year while cementing our position as the industry's lowest C1 unit cost producer. We also achieved full-year records across mining, ore processing, and rail. Keeping our costs low was a huge focus, and over the last two years alone, we have saved around $750 million in C1 costs. Those savings go straight to free cash flow and come from our teams constantly looking at how we can do things better.
That means moving more tonnes safely, getting more out of our equipment, and being really disciplined about where we spend money. When I look across the iron ore business more broadly, we are in really good shape. We have a strong cost position, and we are continuing to invest in our assets to keep them running well for the long term.
Right now, for example, we are in the middle of the biggest shutdown we have ever undertaken across our port operations. We are replacing the tippler cell in train unload one, part of our original infrastructure from 2008, as well as major components on the reclaimer and ship loader. That work is about extending the life of our infrastructure and keeping the system performing at its best. We are also investing in the future of the iron ore business, extending our mine lives, bringing new tonnes online, and continuing to take costs out wherever we can. There is a lot happening, but we go into FY 2027 in a strong position with shipment guidance of 197 million - 207 million tonnes. That includes 11 million - 14 million tonnes from Iron Bridge.
On the financials, which Apple will run through in more detail shortly, we delivered underlying EBITDA of $ 8.6 billion, underlying NPAT of $ 3.5 billion, and free cash flow of $ 3.2 billion. It is a solid result, and again, it comes back to running the business well, keeping our costs down and generating cash. That gives us the ability to invest where it makes sense and keep delivering returns to shareholders. It was also a big year for decarbonizing our Pilbara operations with our zero-emission mining equipment rolling out across the business. We now have 18 electric excavators up and running, and they are outperforming the diesel machines they are replacing. I was in China a few weeks ago and had the chance to get behind the wheel of some of our XCMG battery electric equipment, a water cart, loader, dozer, and grader.
They are great machines, really smooth to drive, and we cannot wait to get them up to the Pilbara soon. Our first battery electric truck is in the final stages of the build and will soon be integrated with the Fortescue Zero power system. This is not a prototype. It will go straight into our operations with hundreds more to follow. We have also started commissioning our first in-house developed fast charger, had another two electric drills arrive on-site, and deployed two battery electric locomotives. As we electrify our operations, we need the people and skills to support it. Our new PowerUp Training Center is helping us build those skills in-house using the same equipment our people will work on in the field. Then there is our Green Grid, one of the largest off-grid green energy networks in the world.
We now have more than 1.3 GW of solar and wind operational or under construction, and that includes 133 MW of wind at Nullagine, where the first turbines are now starting to arrive on-site. Once assembled, they will have a hub height of 188 meters, making them the tallest operating onshore wind turbines in Australia. We are also investing another AUD 680 million to expand the Green Grid and meet growing demand for green power, including from data centers. That investment will add another 200 MW of firmed renewable generation beyond what Fortescue needs for its own operations. We hit another major milestone this week, producing first hot metal from our Green Metal project in the Pilbara. It is the first time we have successfully operated the electric smelting furnace and is an important step towards producing green metal at commercial scale in Australia.
We will now keep commissioning the plant in stages, testing, learning, and optimizing as we go. As I said earlier, we are always looking for ways to lift productivity and get more from our assets. We see AI as one of the biggest opportunities to create value. It will change almost every aspect of how we operate. Through The Hive, we are bringing together data from across mining, rail, port logistics, and energy, and using AI to help run the entire system more efficiently. In our rail network, it is improving scheduling and control in real time, and in processing, it is helping us adjust plant settings based on the ore body we are processing that day. We are also using AI to plan our major projects, testing different construction scenarios in minutes to identify the most efficient approach, reduce cost, and avoid expensive changes once work begins.
On our Green Grid, we are using AI to forecast the weather so we can better plan when to store and when to use it. Decarbonizing operations is much more than buying an electric truck off the market. It is about bringing the whole ecosystem together, trucks, charges, batteries, and green energy, and making it all work as one system. AI is key to making that happen. Autonomy changed how we operated and helped drive down our costs. We see AI doing the same right across the business, making Fortescue simpler, faster, and even more productive. Finally, I want to touch on the work we are doing with communities across the Pilbara. This year, our Billion Opportunities program awarded more than AUD 1 billion to Aboriginal businesses, taking the total to more than AUD 7.6 billion since 2011.
We also strengthened our partnership with the PKKP people through new native title agreements we built around the principle of co-management. Put simply, that gives traditional custodians a stronger voice in protecting heritage and a greater share in the economic benefits created on country. Our VTEC program also marks 20 years with more than 1,600 training and employment opportunities delivered since it began. What we have learned from these programs in the Pilbara is now helping shaping how we work with communities in other parts of the world. With that, I will hand over to you, Gus, to take us through growth and energy.
Thanks, Dino, and good morning, everyone. It is great to be speaking with you all. Our iron ore business gives a strong foundation from which we can grow and diversify Fortescue for the future. Our team is exploring global growth opportunities in a disciplined and commercially focused way, looking across the board at metals, critical minerals, energy, and technology. Growth starts with customers understanding what they want today, what they will need tomorrow, and where Fortescue can deliver the best value. That is what drives our decision-making. I spoke to you all a couple of weeks ago about our industry ongoing engagements with China Mineral Resources Group. While there are no further updates, I want to say once again, we hope to see a return to normal market conditions as soon as possible.
We continue to engage with CMRG through respectful, patient, and good faith negotiations grounded in fair and proper market practices. That is what is the best for China, for Australia, our long-term partners, steel mill customers, and the iron ore industry as a whole. Exploration has been a big part of Fortescue. It is how this company started and is still central to our growth. In the Pilbara, our teams are continuing work at Mindy South and Wyloo, assessing near mine opportunities around our existing operations. During the year, we also update our life of mine plans to include Blacksmith. We have grown the mineral resource there from 243 million tons to 615 million tons. More than two and a half times what it was when we acquired it and unlocking significant values. That means our teams acquired Red Hawk for only $0. 22 a ton of iron ore.
Outside of Australia, we have now drilled more than 230,000 meters at our Belinga iron ore project in Gabon, giving us great understanding of the potential for this site. Beyond iron ore, copper is core to our long-term strategy, with demand being driven by forces reshaping our global economy, electrification, AI, industrial capacity, and energy security. Excuse me. This year we acquired the Cañariaco project in Peru, a large-scale copper deposit that looks incredibly promising. We expect to start drilling by the end of next year. The Cañariaco deposit strengthens and adds our existing drilling program for copper across Argentina, Kazakhstan, Canada, and Australia. The same forces driving copper demands are also supercharging demands for electrons. The world has entered a period of rapid electricity growth. The International Energy Agency calls it the age of electricity and expects demands to grow significantly every year to 2030.
That is 50% faster than the previous decade. That growth is being driven by electrification, green fuels, AI, and data centers. Data center electricity demand alone is expected to more than double by 2030. Renewables will supply a large share of this new demand. Globally, governments and communities are asking data centers to bring new green power, not more fossil fuels. Fortescue is well-placed to meet the demand. We are fundamentally an infrastructure company. We have spent the past few years building and refining our ability to design, construct, and operate large renewable energy systems.
We are promoting this model in the Pilbara, where we are rapidly building one of the world's largest off-grid green energy systems, and nobody in Australia is building more solar than us right now. Our teams have gone from installing 3,500 solar panels a day a few months ago to now rolling out 6,000 a day.
This will only get faster, again, when we bring in automation technology. We are not doing this alone. We have created a global alliance of technology partners to help us deliver. The Pilbara gives us a place to build, test, and prove the Green Grid model. Our technology and operational experience give us a pathway to replicate it globally. Across the world, we have identified locations and opportunities with strong renewable resources. We are looking at how to commercialize these resources, whether that is green hydrogen, green fuels, or data centers. We are assessing opportunities based on our customers' needs and market conditions, and when they are ready to progress, we will have more updates. Importantly for us, technology is what connects all of this. This is why we are on the biggest investors in research and development in Australia, turning innovative technologies into operational solutions.
Our Fortescue Zero teams are key to that, taking tech from the track to our trucks. As technical partners to Jaguar TCS in the Formula E, we not only win championships like we did on the weekend, we test technology to the extreme and transfer that knowledge to our decarbonization portfolio. Our first Fortescue Zero power system inside a Liebherr T260 truck will soon be joining our operation. Our Nabraw ind self-erecting technology will make construction of our wind turbines faster and cheaper. Elysia, our battery intelligence software, will be deployed across our electric fleet and battery storage system, and we are selling it to third-party customers like Jaguar Land Rover. Finally, Fortescue also continue to invest in technology that will drive down the cost of green energy and help to deliver our own green methods projects.
We develop it, test it, prove it, deploy it, and when the technology has a wider commercial market, we will also take it beyond Fortescue and sell it. Let's go now to Apple for more of our financial results.
Thank you, Gus, and a big hello to everyone who has joined us. The business delivered excellent financial results in FY 2026, including high margins, strong free cash flow, a robust balance sheet, and the consistent application of our dividend policy. Starting with the income statement, revenue increased by 9% to $17 billion, reflecting both an increase in realized price and iron ore sales. We remain focused on cost discipline. The hematite C1 unit cost of $18.74 per ton was 4% higher than FY 2025, despite elevated energy prices and ongoing inflationary pressures. Together, this supported a 9% increase in underlying EBITDA to $8.6 billion at a margin of 51%. Underlying NPAT increased by 3% to $3.5 billion. Statutory NPAT of $2.9 billion was impacted by the non-cash impairment charge relating to Iron Bridge and a compensation claim expense consistent with our disclosure in our June quarterly production report.
Turning to the year-on-year EBITDA reconciliation, the largest positive driver for the metal segment was price, followed by volumes. This was partly offset by high operating costs, R&D, and admin expenses. The energy segment EBITDA position improved by $ 319 million. Moving to cash flows, this slide shows that the business maintained its track record of strong cash flows, generating $6.8 billion of operating cash flow and $3.2 billion of free cash flow, which was up 25% on FY 2025. This was after investing $3.6 billion in capital expenditure during the year, including $2.1 billion in sustaining and hub development CapEx and $848 million in decarbonization. Sustaining and hub development capital was around 1/5 lower than FY 2025, while we continued to accelerate investment in decarbonizing our operations.
Looking ahead, FY 2027 guidance implies an increase in sustaining and hub development capital. This includes incremental investment in maintenance at our port infrastructure and initial investment in Blacksmith consistent with the optimized life of mine plan. There is also an increase in capital expenditure for our decarbonization program. Turning to the balance sheet, we continued to optimize our debt capital structure during FY 2026. This included the successful syndication of our landmark RMB 14.2 billion term loan facility and prudent liability management. These initiatives further diversify our funding sources, reduced our weighted average cost of debt, and extended our weighted average debt maturity. We finished the year with a strong and flexible balance sheet with $5.1 billion of cash, gross debt of $5.9 billion, and net debt of just $0.9 billion. This means gross debt to EBITDA was 0.7 x.
Gross gearing was 23%, both comfortably within our through-the-cycle thresholds of less than 2x debt to EBITDA and 40% gearing. This balance sheet strength provides us with the capacity to invest while continuing to deliver returns to shareholders. Consistent with our dividend policy, the board today declared a fully franked dividend of AUD 0.46 per share, taking the full-year dividend to AUD 1.08 per share. This represents a payout ratio of 65% and marks the eighth consecutive year in which Fortescue has declared a payout ratio of 65% or more. On that note, I will hand back to the operator to facilitate the Q&A session, where we welcome your questions.
Thank you. If you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you are on a speakerphone, please pick up the handset to ask your question. Please limit yourself to two questions. You may re-enter the queue for additional questions. Our first question for today will come from Rahul Anand with Morgan Stanley. Please go ahead.
Hi. Good morning, team. Thanks for the call. Appreciate your time. Perhaps we start with just the Iron Bridge cost base. Obviously you guided for the full year in terms of your costs at the start of the year, but you did have a production reduction by about 2 million tons later in the year. I note your costs came in line with guidance, which is good, and obviously you are ramping up the project. But what I wanted to touch upon or understand better is what proportion of these costs can you make variable going forward? I know Dino's comment last time to my question that they are working on, or you are working on, making a larger part of the cost variable, and obviously currently in the ramp-up, I do not think any of them were given, despite the volume cut, the costs were in line with guide.
How should we think about the variable component going forward for Iron Bridge? That is the first one. Thanks.
Thanks, Rahul. I will answer that. Look, there is a higher fixed cost compared to our hematite operations. Right now, especially during ramp-up, we are looking probably around a 70% fixed and a 30% variable. Going forward, we are continuing to optimize this and reduce this where possible.
Got it. Okay. That is very clear. Thanks, Apple. Let us perhaps move on to the green steel plant, which is my second question. I just wanted to understand if you have any targets you have set inside in terms of how big you want to build this plant, what the economics look like, and the cost base as well. Are there particular line items like the energy cost, et cetera, that are key critical moving factors in terms of determining the economics? Anything that you can basically help us understand the economics better would be much appreciated.
Thanks, Rahul. This is not an experiment PR exercise. We are serious about doing this. There are two lenses we look through how big this is going to get. One is the technology pathway out of Pilbara-based iron ore, which this week marked a massive step forward for us. The second, and it has always been as important, is the economics of the energy network to then create either the electron to reduce the iron oxide ore, which this plant demonstrates, is the hydrogen reduction path. So hydrogen is very much still front and center of our aspiration. Now, to create the economic conditions for the hydrogen, you need a massive glut of electrons, as we talked about internally.
That is why I point to how this connects with our industrial vision in the Pilbara of a massive network of electricity, which then feeds the iron ore business, feeds third-party sales of electrons, but also, for us, more importantly, creates the downstream industries like green metal and green ammonia, which we see have massive applications and huge value growth opportunities for us in the midterm.
The next question will come from Paul Young with Goldman Sachs. Please go ahead.
Morning, Dino, Gus, Apple. Hope you're well. First question is on the negotiations with CMRG at the moment. I know you made some broad brush remarks there. They're dragging on a little bit, and they're obviously pretty tough negotiations. I'm just wanting to know, can you share any color on during the negotiations, is there any impact on your sales volumes, inventory build at ports or working capital, et cetera, during this period?
Hello, Paul. Gus here. I will take that one as I'm leading that side of CMRG, as I told you last time. Again, the current inventory levels are well with normal range. Yes, we are going through the negotiation process. As you know, this is an example of trade friction that is affecting the R&R industry. Conversations are going on the way, and I will disclose when things get further on.
Okay. Thanks, Gus. Dino, I have a question for you on just the mine plan and, obviously, with the new product strategy unfolding over the next couple of years. I just want to dig into Blacksmith again, a good news story here around capital-light project and replacing Firetail in the next couple of years. I noticed that you have released your first reserves there, and also there's been an increase, I note, in Christmas Creek and also Eliwana. Just on Blacksmith, I think I see you've completed the feasibility study in June, and I think it's up to 30 million dmt a year. So, can you share any color around first production there and actually the capital for this project?
Probably not as much color, Paul, as you want. But we are extremely satisfied with the acquisition. It is good to get some information out about the declaration. I have Bejoy Cyriac next to me, who is the Director of Technical Services for us, and he can give a bit more color on capital intensity, where it fits in the mine plan and volumes, and why it is so important for us in terms of our cost position.
Thanks, Dino. Paul, as we mentioned, this adds significant value to our portfolio, and it is a key enabler to maintain our product strategy. Fortescue has a history of spending capital very efficiently, and we will take the same discipline to Blacksmith as well. In that spirit, at this stage, we are looking Blacksmith by end of this decade. As you mentioned there, this has helped us to enable our product strategy, reduce our strip ratio, and move our major hubs, which is Mindy South and Nyidinghu into the next decade.
The next question will come from Kate McCutcheon with Bank of America. Please go ahead.
Hi, good morning, Dino and Apple. Just on the CapEx piece, can you remind me where we are at with the gray fleet replacement? How much is left to go there? And in that CapEx spend guidance, how much of that $ 2.3 billion-$ 2.7 billion sustaining and hub development is for that gray fleet replacement?
Yeah, thanks, Kate. Look, the gray fleet replacement falls well and truly within the sustaining hub development, as you mentioned. It is lumpy. We are going through fleet replacement cycle, and it is very much locked in with our plan around our decarbonization as well, which the incremental part goes into the decarbonization bucket. It is lumpy, but we are looking at probably around the height of it now to the next year or so. That is going through the sustaining hub development. We just do not go into that granular detail now. But you are right, absolutely right. Our FY 2027 guidance, $2.3 billion - $2.7 billion includes the gray fleet replacement.
Okay. I think previously in the cost guidance, we had mentioned you would expect about $100 million benefit from decarb all else being equal. Is that still the assumption for the guidance cost?
Yes, that is. We mentioned around the Green Metal P roject, that was $100 million, of course, taking into account the expanded tech pathways. Thank you.
Sorry, Kate. It is Andy here, just to clarify. Yeah, that is on the capital part, but yes, no change to anticipating about $100 million of operating cost savings this year as a result of decarb progress.
Yeah, that's the one. Thanks, Andy.
The next question will come from James Redfern with RBC Capital Markets. Please go ahead.
Good morning, Dino, Gus, Apple, and Andy. I just want to dig into the comments you made about the planned maintenance at Port Hedland currently underway on one of the three ship loaders. I just want to understand a bit more about that maintenance in terms of how long. Okay. Is Fortescue operating on two out of three ship loaders currently, and how long will that maintenance take? Thank you. That's my first one.
Yeah, thanks for picking that up. We're in a multi-year replacement cycle of some of our critical infrastructure down at the port. However, we have factored that into our guidance, and we're very comfortable that we can maintain that sweet spot of north of 200 million tonnes throughout that period, as is evidenced by the shutdown that's going on at the moment.
Just to add to that, this falls within our sustaining hub development and represents one of the increases that we see year-on-year around the port infrastructure as well as Blacksmith.
Okay. Thank you. All right. I will leave that one there. The second question just relates to Fortescue's ambitions with regards to copper. Noting that Fortescue completed the acquisition of Alta Copper earlier this year. I just want to understand, has Fortescue got any internal targets, if you like, for copper production in the future? Not from Alta Copper per se, but just as a company. Is there a target for how much copper Fortescue would like to be producing in, say, five years' time from now? Thank you.
Yeah, thank you for the question. Yes, as I constantly said the last year, our copper is in a firm foot of our strategy, as you just mentioned Alta Copper. We discussed last call about drilling next year, and that is our main focus. We also have the midterm goal of different projects that we are exploring in Argentina, Kazakhstan, and Canada. Yes, we are full ahead with copper and hopefully in the midterm we will have some good news.
The next question will come from Lyndon Fagan with J.P. Morgan. Please go ahead.
Good morning, everyone. Thanks for the call. First one's just on Iron Bridge. I guess we've been battling on for three years, set to make another cash loss this year by the look of it. At what point do you start considering a curtailment of this operation, given it would alleviate the port and would actually stem some cash losses?
A nice try, Lyndon. We're going to keep ramping this up, mate. We believe in the asset. We believe it's a differentiator in terms of our products. We're not concerned about the port bottleneck that you potentially highlight. We have many options in de-bottlenecking hematite further, if that's a scenario we want to take place. But for the next year or so now, it's full steam ahead getting this asset. We've deployed a lot of capital into it. It's a personal ambition of a lot of people here to get this thing now cranking up to full capacity, and that's what we're going to do. We'll make cash on it on the way through.
Okay. Hopefully we see that coming through. The other one's just a bit of housekeeping. The admin costs are up at $ 579 million, up almost $ 150 million YoY. Is there any one-offs in that or are we dragging that right?
Yeah, thanks, Lyndon. Look, the admin expenditure should be assessed in aggregate with R&D expense. Together, they were almost flat year-on-year, actually slightly down, Lyndon. There have been some impacts on admin resulting from a refinement of our classification of R&D expenditure. On a segment basis, the scope of activity in metals has increased while the reduction in energy activity has meant that metals have a greater allocation of copper and shared services. But look, looking ahead, we are focused on maintaining these costs in real terms.
The next question will come from Lachlan Shaw with UBS. Please go ahead.
Morning, Dino, Apple, Andy, and team. Thanks very much for your time and the questions two from me. Can I start just with FY 2027 CapEx guidance? Obviously, it is a pretty fair step up from FY 2026 and a pretty wide range at this point, $ 1 billion. I am just wondering in a scenario potentially of further weakness in the iron ore price and or realizations, what flex do you have in the capital program in terms of timing, phasing scope to potentially delay or defer? Or would you instead look at perhaps trying to tap the strong balance sheet to keep that program of works ongoing? I will come back with my second question.
Yeah, thanks. A great question and you are going to hear the same thing from Apple and Gus, is we make decisions based on the health of our balance sheet at any point in time in the cycle, whatever the market condition is. We always preserve good optionality in how we deploy capital. We own a lot of the overhead and control, which is why we have such good capital intensity. It also then gives us the option, should we need to hold things or bring things forward, we can.
Great. Thank you. Then just second question, a little bit of a high level one just in terms of the ROIC chart in the deck. I am just wondering, when you look across the options in the portfolio around capital investments, which projects across the standing hub, Belinga, Green Grid, Pilbara, Energy Green Iron, which ones do you think have the potential to make the strongest contribution to lifting and or keeping ROIC at an attractive level for shareholders? Thanks.
Yeah, look, it is a really good question. The way I guess I'd say is a number of those options that you talk to are not independent. They actually talk to an industrial ecosystem that benefits each other. You get energy, feeds iron ore, feeds the green metal, as I already talked about. I'd say that the one that unlocks it is getting the electron. That's why the majority of our effort is building the high voltage distribution networks, the solar, the wind, the acquisition that we made around wind technology in Nabrawind, the supply chains we've worked on for the last few years on battery installations means that we are in this enviable position where the deployment of capital, how fast we can bring these electrons to market, is unique.
I know Gus is chomping at the bit to then take what we've done and apply it. Gus, anything else?
Oh, Dino, just reinforce what you're saying. To understand it and taking it outside about just a mining company, this is the big pivot strategic decision that we've taken a couple of years ago, and now we're trying to look at those opportunities, like Dino said, how to optimize that electron. I said it before, the ecosystem that we built in the Pilbara and how we're looking at each P&L, and since I took this job the last year, as you've seen, it was to just bring the discipline way into a clear P&L positive, where optimizing the electron would be the best way to go to market in whatever shape or form we decide.
We believe, again, without going to trends of data centers or green ammonia, what it was is that we are ready with the electron because with experience of the operation teams to optimize those CapEx is to allocate the capital properly towards a good result in the future for the company.
The next question will come from David Feng with CICC. Please go ahead.
Oh, hi. Good morning. Thanks for taking my question. I just have a follow-up question on your AI applications. I just noticed that in your annual report, you have spoken quite positively about AI as the next major productivity opportunity after autonomy. You mentioned there are 15 AI projects delivered with the target ROI over three years. So just besides the example you mentioned, like doing weather forecast for your green energy operations, could we have one or two more examples where AI is already delivering measurable operational benefits and how mature we think the opportunity could become, of course, mining, processing, and energy over the next few years? Thanks.
Yeah, a lot in that, David. I think if you go back for a few calls, I did speak quite specifically on the volume increment that we got in our rail network via the deployment of AI and agents in our logistics and scheduling operation. We've actually increased that scope, and now deploy the same technology across the entire supply chain back to the mine. The decarb program itself, when we talk about $2-$4 a C1 impact, which we've been public on the removal of diesel. Again, I link to how software and AI enables not only a hardware purchase, but the integration of the network. For us, it is about how do we improve our cost position, but also how do we bring more volume into the market through our supply chain.
Thank you very much.
The next question will come from Adithya Mohan with Standard Chartered Bank.
Hi, everyone. Congratulations on the great set of results. My question is regarding the CMRG negotiations that is going on. Do we expect any knockdown effect or disruptions to volumes on shipment level this quarter? Thanks.
Hello, Adithya. As I said, I cannot predict the future. We are still in, as I said before, in negotiations. We just expect a fair trade result, and that is what we are aiming at. Meetings have been quite positive. The current inventory levels are well within normal range. That is what I can say up to now.
All right. Thanks, Gus.
The next question will come from Baden Moore with CITIC CLSA. Please go ahead.
Morning. Thanks for taking the question. Just on the Green Grid, I was just wondering if there was any feedback you could share on how you're going marketing on offtake for the new capacity that you said you were looking to add, where the data center demand is difficult to capture. Is there any progress there, and how are you thinking about that project in terms of the commercial outlook at this point?
Yeah, look, we haven't, to be completely honest, had to market it that aggressively. There is a lot of applications in the Pilbara which use obscenely high cost per megawatt. There's a lot of examples where you have liquified natural gas tankers driving 1,000 kilometers to then spin turbines which is almost insane if you were to rebuild it again with the solar, wind, and battery technology and the intensity and cost structure we can deploy it for. So that's an option. Our other options are, as you said, data center applications. Alongside the power infrastructure that we feel very confident in ability to build the speed to market requirements, there is the fiber and connectivity that is also right at our doorstep in the Pilbara. So it's quite a unique position that we find ourselves in. We're learning every day.
We're learning about what it takes to build data centers and what customers require. I would say that federally and at a state level, there's also good support we're getting to look at how this industry can reshape the value proposition for Australia. We're actively participating in that. I'd come back to the only reason why we're able to have some of those conversations now is for the last four years, we've been building a network that is value accretive for our base business. As it happened, we've built the asset and now there is demand for behind the meter off-grid systems, not in anyone's backyard, through deployment of 4,000 or 5,000 solar panels a day, which we're all doing internally. It is a monumental piece of infrastructure that we've built.
Yeah. Just one follow on. I guess I was just wondering if there's the demand there, what point do we expect that to become more concrete for us in terms of level of off taking capacity? When do you start signing those customers up? When should we look for that?
Yeah. We haven't guided anything at this stage. I won't add any further color to what I've already talked to.
The next question will come from Adrian Rauso with The West Australian. Please go ahead.
Oh, hi, guys. Thanks for taking questions. Mine's also on CMRG. I was just curious because there's a lot of, I guess, speculation going around at the moment that the government might look into creating a framework to give the likes of yourselves, BHP, and Rio, I guess, exemption from antitrust collusive negotiation powers. Would that be something that you might be, I guess, interested in exploring, basically negotiating as a block with CMRG?
Hello, Adrian. Thank you for the question. At the moment, we are just focusing on CMRG. We are in the early stages of the discussions because we started a couple of months ago, as I told you. So we are just, at the moment, the only option that we are seeking is discussing with them directly.
Okay. Thank you.
The next question will come from Mark Wembridge with The Australian Financial Review. Please go ahead.
Morning, guys. Thanks for taking my question. Just noted that Fortescue has called in MinterEllison to investigate claims of inappropriate behavior by an executive. I do not really want to get into the details of that, but I am just curious as to know why Fortescue has not temporarily stood down that executive while the claims are being investigated. Is that not best practice in these situations?
Well, thank you for the question. Yes, Fortescue has taken extensive external legal and governance advice and considers that the current arrangements are appropriate while the independent investigations are underway. I am sure Dino can add to me and the whole team here. I think Jackie's on the line before HR. Our top priority is our people, and sexual harassment and unlawful discrimination and any behavior that makes people feel unsafe have no place here on our leadership.
Sorry, just to follow up. Does it not concern you, though, that this might be construed as Fortescue taking a side in this situation by not at least temporarily standing down the executive and allowing the time for MinterEllison to make their investigation?
Well, again, as I just mentioned, and going back to our, the priority is our people, that we have taken extensive external legal and governance advice to make the decisions we are making. We are quite confident we are following the proper process.
Thank you.
Again, if you have a question, please press star then one. Our next question is a follow-up from Paul Young with Goldman Sachs. Please go ahead.
Yeah, thanks, and hi again. Can we talk about the Green Truck program a little bit more? I see, Dino, you're deploying in FY 2027. I see also in the annual report, you're saying that the Flying Fish's target is the first load and haul green operation, and that'll happen in FY 2027. I think you're targeting FY 2030, 2031 for full deployment. Can you remind me, within the $ 6.2 billion, what is actually allocated to the green kit and what that profile might look like over the next couple of years, assuming things are successful?
Thanks, Paul. It will be successful. Just reflect on your last job there. I look at the $ 6.2 billion as roughly in thirds. You've got a third for generation, a third for distribution and charging infrastructure, and then a third for all the kit. We've already started to take delivery of some of the kit. But you're right in calling out that the next two years will be the peak of delivery of the full contingent of nearly 700 pieces of equipment.
Okay. All right. Thank you. Can I switch over to Gabon. It's early days, but that said, you're doing a lot of drilling and you're submitting the EIS, I think, end of the year, and then it goes into the EIA process with the government, and you're doing your studies clearly on the project at the same time in parallel. Can you just step through potential timing of the environmental assessment by the government of Gabon and also the timing of your studies?
Yes. As I said before, we have more than 200,000 meters of drilling completed. You mentioned correctly, as I said, December will be crucial for us to just give you that timeline that you are asking about. We are in the same mode, expecting the same as how we go from there. Again, we are looking at very good numbers and very prospective numbers. So we will address this probably by December on the next steps because there is a detailed technical engineering and geotechnical environment and social studies that are going on at the moment.
I am going to be in Gabon again next month to see how that progress is going. Our team on the ground are working really well. So I could not give you more color than that. Hopefully by December, we can expand further on more decision-making that will come after everything that I just disclosed to you.
The next question will come from Simon Johanson with The Age newspaper. Please go ahead.
Hi, folks. Look, just following up on the previous sexual harassment question. Just your competitors, BHP and Rio Tinto, detail how many cases of sexual harassment they have annually and what was done in resolving those cases. Can you tell us exactly how many cases you have had of sexual harassment at your worksites over the past year and whether that is improving?
Thanks for the question, and again, reiterate Gus' comments. We take this matter extremely seriously across the entire organization. So we have, in our sustainability report, issued detail. So I will not get into the specific answers around harassment, assault versus dismissals or discrimination. It is all very, very transparent in our reporting. So I will point you that way.
Thank you.
The next question is a follow-up from Lachlan Shaw with UBS. Please go ahead.
Oh, thanks guys for taking my follow-up. I just wanted to just come back to Blacksmith for a minute. Obviously, resource upgrade, pretty pleasing. 56% grade is interesting. Can you just help us understand what's the dispersion in the resource of that grade, and how do you think about that coming into the mine plan? Obviously, I'm guessing that'll come later, well into the 15, 20 years of effective mine life. Thanks.
Yeah. This is Bejoy. We have integrated Blacksmith into our life of mine plan to maintain our existing product strategy, and that's the whole intent of bringing Blacksmith. It relates to our Solomon Hub and the grades that are coming from Blacksmith is aligned to that, and that's why you're seeing a reduction in the cutoff and what is aligned to our product strategy. That's what feeds into our life of mine plan, and we are able to work through and feed Firetail for the next 20 years.
The next question will come from David Harkess Coates with Bell Potter Securities. Please go ahead.
Good morning, guys. Congratulations on the result and thanks for the opportunity. Question on the Green Grid. Just wondering what proportion of the CapEx we should be, I guess, amortizing over your iron ore production, and what kind of replacement cycle or timeframe that would run over? That's my first question.
Oh, yeah. Look, I wouldn't go through towards the amortization part, but I would look at around AUD 680 million. Most of that will be spent in FY 2028, probably about 70% of that. And on either sides, I'd say, the remaining 30% would be spent. So that should provide you some phasing, at least, around the Green Grid spend.
Okay, thanks Apple. And secondly, the XCMG haul trucks. Can you just confirm they're 240 tonners, I believe, and if they're in operation anywhere else or if this is going to be a sort of a first when they roll out with you guys?
Yeah. An XCMG equivalent size diesel electric truck already operates, but this will be the first offering that XCMG will make of a 240-ton truck, fully electric, in our application.
The next question will come from Melanie Burton with Thomson Reuters. Please go ahead.
Hi all. Thank you for your time today. Just following up on the sexual harassment questions. I heard that you didn't want to go into detail, but I looked at the figures in the sustainability report. It doesn't say anything about if anyone was fired or let go. I may have missed it in the sustainability report. It outlined the various numbers, but nothing about workers that have been let go, which is something that, if in fact any have. And the reason I'm asking is because that's a number that your peers disclose. It might be a case that there's none. Am I missing it? Is it there?
Yeah, it's certainly there. But I can reiterate the numbers. There are 11 dismissals, 69 alleged breaches, 29 of those related to discrimination and harassment, and again, 11 dismissals.
Thanks for that.
There are no further questions at this time. I will now hand it back over to Mr. Otranto for closing remarks. Please go ahead.
Oh, thanks everyone. We went over time today. It was excellent interest in what is a good set of claim results. Thanks again, everyone who participated in today's call. Thank you.
This does conclude our conference for today. Thank you for your participation. You may now disconnect.