Fortescue Metals Group, the world’s fourth largest iron ore exporter, said on Friday its chief executive Nev Power would step down in February after seven years in the role.
The Australian mining group did not name a successor but said it was confident of finding a replacement for Mr Power, who is well regarded by investors for stewarding the previously debt-laden company through the commodities crash.
“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,” said Andrew Forrest, Fortescue’s chairman and founder.
“This is consistent with our long term succession plan and we both share great confidence in the quality of internal and external candidates to continue Fortescue's legacy,” he said.
Fortescue shares closed down 4.5 per cent at A$5.55.
Mr Power, who was chief executive of Thiess and Smorgon Steel group before joining Fortescue, is credited with steering the miner through a turbulent period when iron ore prices crashed to $40 a tonne in 2015, down from above $150 a few years before.
“Nev has done a tremendous job overseeing a material lift in output and reduction in unit costs that has enabled FMG to de-gear and remove the threat of insolvency,” said Glyn Lawcock, UBS analyst.
Last month Fortescue reported a net profit of $2.1bn in the 12 months to end of June — up 112 per cent on the previous year. It lifted its full-year dividend from $0.15 to $0.45 and reported that net debt had fallen 21 per cent to $2.6bn.
Mr Lawcock said a new chief executive would have to think about what the next phase of the Fortescue’s development — whether it should remain a one product company or diversify into other materials. He said the company must also consider how to respond to discounting by steel mills for lower grade ore as it searched for growth opportunities.
“The challenge will be how to think about FMG’s position in the iron ore market should the discounts for low grade iron ore persist, especially if the push by steel mills to maximise output through use of higher quality inputs continues,” said Mr Lawcock.
Citi said in a note that the most likely internal candidates to replace Mr Power include Elizabeth Gaines, who joined FMG’s board in 2013 and took the chief financial officer role in February. Greg Lilleyman, who joined Fortescue in January from Rio Tinto and is director of operations, is another potential internal candidate.