Forrest fights 'evil' impost

THE mining billionaire Andrew Forrest believes his crusade against Australia's mining tax is a fight against "evil" but, after Friday's events, he has fewer lieutenants to take up the battle.

By InvestSMART · 17 Nov 2012

By InvestSMART ·
17 Nov 2012

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THE mining billionaire Andrew Forrest believes his crusade against Australia's mining tax is a fight against "evil" but, after Friday's events, he has fewer lieutenants to take up the battle.

Mr Forrest's company, Fortescue Metals, was rocked by the resignation of its external and government affairs boss, Deidre Willmott. The circumstances of the departure remain unclear but Ms Willmott's move continues a period of high turnover within the top ranks of the iron ore exporter.

Among the scores of workers sacked by Fortescue during a sudden debt crisis in September were external relations executives such as Julian Tapp and Rod Campbell.

Ms Willmott is known in Melbourne for her time as a top executive in the organising committee of the 2006 Commonwealth Games.

In Perth, she is better known for her Liberal Party connections, having been preselected for the seat of Cottesloe only to stand down when the West Australian Premier, Colin Barnett, who was then in opposition, reversed his retirement plans.

Ms Willmott has joined corporate advisory firm Cannings Purple as executive chairman.

Her departure came on the day that Mr Forrest told ABC radio his High Court challenge against the mining tax was about conquering evil.

Sampling from the proverbs of Irish philosopher Edmund Burke, Mr Forrest said evil would triumph when good people do nothing.

"We've decided not to do nothing," he said.

Mr Forrest also defended Fortescue's recent unsuccessful attempt to have more than $200 million in royalty payments to the West Australian government deferred, saying that the bid was logical.

Mr Forrest said the deferral was sought to ensure that expansion works at the Kings iron ore project could resume, after a dip in the iron ore price to $US90 ($87) per tonne during September halted work on the project.

Mr Forrest said the WA government would have much bigger economic benefits from the Kings project going ahead than from a single royalty payment and the deferral was designed to ensure the expansion could continue if iron ore prices stayed around $US90 per tonne.

But Mr Forrest said the request became redundant when the iron ore price recovered to the current level around $US120 per tonne.

"We put that logic to the WA government," he said. "But with the iron ore price going from $US90 per tonne to $US120 per tonne, they said 'Guys, you can bring on Kings whenever you like'."

Fortescue shares fell 6? to $3.90.

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Frequently Asked Questions about this Article…

Who is Andrew Forrest and why is he challenging Australia's mining tax?

Andrew Forrest is the mining billionaire behind Fortescue Metals. According to the article, he has taken a High Court challenge against Australia’s mining tax and described the fight as a crusade against what he called 'evil', saying he and his team decided not to do nothing.

What recent management changes at Fortescue Metals should investors know about?

Fortescue was rocked by the resignation of its external and government affairs boss, Deidre Willmott. The article also notes a period of high turnover in the company’s top ranks, including earlier dismissals of external relations executives such as Julian Tapp and Rod Campbell.

Who is Deidre Willmott and where did she go after leaving Fortescue?

Deidre Willmott was Fortescue’s external and government affairs boss. She is known for her role on the organising committee of the 2006 Commonwealth Games and for Liberal Party connections in Western Australia. After leaving Fortescue she joined corporate advisory firm Cannings Purple as executive chairman.

How did the market react to the senior departures at Fortescue Metals?

The article reports that Fortescue shares fell to $3.90 following the period of turnover and the resignation mentioned in the story, signalling a negative market reaction to the management changes described.

What was Fortescue’s royalty deferral request to the Western Australian government?

Fortescue sought to defer more than $200 million in royalty payments to the Western Australian government. The company said the deferral was logical to allow expansion work at the Kings iron ore project to resume after a dip in iron ore prices halted work.

Was Fortescue successful in obtaining the royalty deferral?

No. The article describes the attempt as unsuccessful, and Andrew Forrest said the request became redundant when iron ore prices recovered.

How did iron ore price movements influence Fortescue’s Kings project plans?

Fortescue said a fall in the iron ore price to about US$90 per tonne in September had halted work on the Kings project, prompting the royalty deferral request to allow expansion works to resume. When the iron ore price recovered to around US$120 per tonne, Forrest said the deferral request was no longer necessary.

What should everyday investors watch next regarding Fortescue Metals and the mining tax case?

Based on the article, investors should monitor the progress and outcome of Andrew Forrest’s High Court challenge to the mining tax, any further senior management changes at Fortescue, movements in iron ore prices that affect project plans like Kings, and how the company’s relationships with the WA government evolve.