Iron ore giant's profit falls due to green steel hit

The iron ore giant founded by billionaire climate crusader Andrew Forrest has posted a drop in statutory profit due to issues with its move into green metals and a court case brought by traditional owners.

Fortescue's statutory profit fell 15 per cent to $US2.86 billion ($4 billion) for the 12 months to June 30, the company announced Thursday.

That's in part due to a US$525 million ($737 million) non-cash impairment on its troubled Iron Bridge magnetite mine as well as $150.1 million in compensation that Fortescue was ordered to pay the Yindjibarndi Ngurra Aboriginal Corporation in May.

Fortescue sees Iron Bridge as a step toward lower-emission steelmaking because magnetite has a higher iron content than hematite, which is predominantly mined in the Pilbara, and improves furnace efficiency, creating fewer carbon emissions.

However, the mine has never achieved its nameplate capacity of 22 million tonnes, with Fortescue on Thursday predicting Iron Bridge would produce just 11 to 14 million tonnes in 2026/27, so under accounting rules it has had to write down its estimated value of the asset.

During a conference call on Thursday, Fortescue Metals and Operations chief executive Dino Otranto dismissed an analyst's suggestion that the company might consider a curtailment of Iron Bridge's operations given that it looks set to make its third straight cash loss this year.

"We're going to keep ramping this up, mate," Mr Otranto said. "We believe in the asset. We believe it's a differentiator in terms of our products.

Fortescue said the compensation claim represented a $US73 million ($102 million) hit to its bottom line.

The Federal Court ordered the $150.1 million payout to the Yindjibarndi group on May 12 after the company dug up millions of tonnes of iron ore from their lands without their permission.

Fortescue's underlying profit, which excludes those two issues, rose three per cent to $US3.5 billion ($4.9 billion).

The figures were in-line with with expectations, with underlying earnings slightly above consensus estimates, RBC Capital Markets analyst James Redfern said.

The company ended the year with US$5.1 billion ($7.1 billion) in cash and a net debt of just $0.9 billion, Mr Otranto said.

''That puts us in a strong position to continue investing in growth while delivering returns to shareholders," he said.

Fortescue didn't address the Yindjibarndi court case on Thursday but did note it had awarded $1 billion in contracts to Aboriginal businesses in 2025/26, up five per cent from a year ago.