Fortescue Metals Group: Becoming "The new Force in Iron Ore"

In 2003, Andrew Forrest planned to enter the iron ore industry, which was highly capital intensive, consolidating, and dominated by three companies. Less than five years later, his start-up, Fortescue Metals Group, loaded its first ore onto a ship bound for China. In those five years, the Western Australia company raised more than US$2.5 billion, acquired more than 1 billion metric tons of iron ore reserves, built a mine and processing facility, 256 km of railway, and a port for large ore-carrying ships. Fortescue was profitable in its first full year of production, and expanding its capacity. This case describes Fortescue’s early years, the challenges the company faced, and the ways it met those challenges. It also describes challenges facing the company in October 2010, as it look to the future.