It's not for Dryblower to tell Andrew Forrest how to run Fortescue, the $60 billion company he created, but some shareholders might be feeling uneasy about recent events which include a less than sparkling quarterly report and Forrest's fresh attack on the oil and gas industry.
The two issues appear unrelated but could possibly be measured in Fortescue's share price falling by 3.5% last week when the company's only product, iron ore, rose by a few dollars to US$105 a tonne in Singapore.
Whether the price can stay above US$100/t is the big question for all Australian iron ore producers with last week's rise probably related to the interruption to rail and shipping on the north-west coast caused by the passage of cyclone Sean off the coast of WA.
It's what comes after cyclone season which is the focus of investors exposed to iron ore because it is, in turn, exposed to Cyclone Don, also known as the US president Donald Trump.
A trade war with China is very much on The Don's to-do list, which started out looking slightly bizarre and while popular with some people in the US is starting to shift from bizarre to alarming, if reports of his land-grabbing intentions are correct.
Panama, Greenland and Canada are on The Don's property acquisition wish list, which is the natural progression of a New York property developer, along with threats of trade sanctions and punitive tariffs aimed at crippling rival economies with Colombia, China and Russia top of that list.
Unfortunately for Australia it is at the end of a food chain that starts with China's steel industry, which buys iron ore to make stuff, which is sold to the world, especially the US, meaning any threats leveled at China are a threat to Australian iron ore miners.
Banks uneasy
That background explains why investment banks are uneasy about the outlook for iron ore which Macquarie said on Friday would drop to $85/t this year, on its way down to $73/t next year and the $66/t in 2027.
Price forecasts like that, as we all know, have been wrong more often than right over the past few years, but that was a time known as BD (Before Don) with the future now looking hugely unclear.
It's the iron ore uncertainty factor, and the curious fascination Forrest has with fossil fuels, which is stirring disquiet among Fortescue watchers, starting with the quarterly that looked pretty good at first blush, but which failed to impress analysts.
Goldman Sachs likes Fortescue but is sticking with a sell tip and price target of A$16.40 simply because the current share price is too high. Macquarie is equally cautious saying sell with a price target of $15.25. UBS reckons the fall will be limited to $17.50.
But, as mentioned earlier, it wasn't just iron ore which was on Fortescue's agenda with the company wading once again into a campaign against the fossil fuel family of coal, oil and gas.
'Bizarre' obsession
In a statement that sits in the same bizarre category occupied by The Don, Fortescue said it had become the first major industrial company to endorse a "Fossil Fuel Non-Proliferation Treaty" which aimed to set a clear deadline for phasing out fossil fuels.
Readers will hopefully forgive Dryblower for his ignorance, but he is struggling to see the connection between mining iron ore and phasing out fossil fuels.
One is part of a crusade to save the plant from carbon pollution, which is admirable if a little unrealistic. The other is about selling iron ore, trousering the profit and paying a handsome dividend to shareholders.
Forrest is, of course, entitled to his personal position and can spend as much of his own money as he likes on a private campaign, but last week's statement was not personal. It was stating a corporate position which might not be the view of all Fortescue shareholders.
And then there's the most interesting issue of all which is the gap opening between Forrest's energy-related investments that include attempts to create a viable hydrogen fuel business and what's happening in Don Land, also known as the US.
Gas obsession
Over there a full-blooded drive to grow the fossil fuel business is underway with a focus on gas to provide the power to drive electricity hungry data centres serving the first boom technology of the 21st century, artificial intelligence (AI).
According to the Financial Times newspaper as many as 80 new gas-fired power plants will be built in the US by 2030.
Much to Forrest's dismay he will also find that Australia is joining the gas boom as governments discover that renewables can't meet the demand of a modern economy and while wind and solar are making a valuable contribution they only work when the sun shines and the wind blows.
The final point from Dryblower for Fortescue shareholders to consider is what exactly did they get from chasing a hydrogen dream and what might they get from endorsing a fossil fuel non-proliferation treaty?
Not much is the answer and while there is no doubting Forrest's mercurial brilliance, it might be time to stop crusading and focus on what Fortescue does best, before The Don starts his trade war with China which could see the iron ore price fall into a hole.
DRYBLOWER
Dryblower on the fossil fuel fight: Twiggy v The Don
‘Blower struggles to see the connection between mining iron ore and phasing out fossil fuels
Credits: MNN
It's not for Dryblower to tell Andrew Forrest how to run Fortescue, the $60 billion company he created, but some shareholders might be feeling uneasy about recent events which include a less than sparkling quarterly report and Forrest's fresh attack on the oil and gas industry.
The two issues appear unrelated but could possibly be measured in Fortescue's share price falling by 3.5% last week when the company's only product, iron ore, rose by a few dollars to US$105 a tonne in Singapore.
Whether the price can stay above US$100/t is the big question for all Australian iron ore producers with last week's rise probably related to the interruption to rail and shipping on the north-west coast caused by the passage of cyclone Sean off the coast of WA.
It's what comes after cyclone season which is the focus of investors exposed to iron ore because it is, in turn, exposed to Cyclone Don, also known as the US president Donald Trump.
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A trade war with China is very much on The Don's to-do list, which started out looking slightly bizarre and while popular with some people in the US is starting to shift from bizarre to alarming, if reports of his land-grabbing intentions are correct.
Panama, Greenland and Canada are on The Don's property acquisition wish list, which is the natural progression of a New York property developer, along with threats of trade sanctions and punitive tariffs aimed at crippling rival economies with Colombia, China and Russia top of that list.
Unfortunately for Australia it is at the end of a food chain that starts with China's steel industry, which buys iron ore to make stuff, which is sold to the world, especially the US, meaning any threats leveled at China are a threat to Australian iron ore miners.
Banks uneasy
That background explains why investment banks are uneasy about the outlook for iron ore which Macquarie said on Friday would drop to $85/t this year, on its way down to $73/t next year and the $66/t in 2027.
Price forecasts like that, as we all know, have been wrong more often than right over the past few years, but that was a time known as BD (Before Don) with the future now looking hugely unclear.
It's the iron ore uncertainty factor, and the curious fascination Forrest has with fossil fuels, which is stirring disquiet among Fortescue watchers, starting with the quarterly that looked pretty good at first blush, but which failed to impress analysts.
Goldman Sachs likes Fortescue but is sticking with a sell tip and price target of A$16.40 simply because the current share price is too high. Macquarie is equally cautious saying sell with a price target of $15.25. UBS reckons the fall will be limited to $17.50.
But, as mentioned earlier, it wasn't just iron ore which was on Fortescue's agenda with the company wading once again into a campaign against the fossil fuel family of coal, oil and gas.
'Bizarre' obsession
In a statement that sits in the same bizarre category occupied by The Don, Fortescue said it had become the first major industrial company to endorse a "Fossil Fuel Non-Proliferation Treaty" which aimed to set a clear deadline for phasing out fossil fuels.
Readers will hopefully forgive Dryblower for his ignorance, but he is struggling to see the connection between mining iron ore and phasing out fossil fuels.
One is part of a crusade to save the plant from carbon pollution, which is admirable if a little unrealistic. The other is about selling iron ore, trousering the profit and paying a handsome dividend to shareholders.
Forrest is, of course, entitled to his personal position and can spend as much of his own money as he likes on a private campaign, but last week's statement was not personal. It was stating a corporate position which might not be the view of all Fortescue shareholders.
And then there's the most interesting issue of all which is the gap opening between Forrest's energy-related investments that include attempts to create a viable hydrogen fuel business and what's happening in Don Land, also known as the US.
Gas obsession
Over there a full-blooded drive to grow the fossil fuel business is underway with a focus on gas to provide the power to drive electricity hungry data centres serving the first boom technology of the 21st century, artificial intelligence (AI).
According to the Financial Times newspaper as many as 80 new gas-fired power plants will be built in the US by 2030.
Much to Forrest's dismay he will also find that Australia is joining the gas boom as governments discover that renewables can't meet the demand of a modern economy and while wind and solar are making a valuable contribution they only work when the sun shines and the wind blows.
The final point from Dryblower for Fortescue shareholders to consider is what exactly did they get from chasing a hydrogen dream and what might they get from endorsing a fossil fuel non-proliferation treaty?
Not much is the answer and while there is no doubting Forrest's mercurial brilliance, it might be time to stop crusading and focus on what Fortescue does best, before The Don starts his trade war with China which could see the iron ore price fall into a hole.
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