Fortescue Metal Group (FMG) Major Resources and Capabilities
Resources and capabilities of one company is a crucial in the implementation of its strategic and operational plan. A sufficient manpower, skills and materials are needed to accomplish FMG’s mining operation. FMG has a good infrastructure development in a short period of time. It has a good capabilities for expansion. Its assets of expansion is located in Pilbara and it operates in two sites which is the Christmas Creek and Cloudbreak wherein there are more than enough reserves of iron ore that can sustain for two decades. There is also an exploration phase taking place in its third site Solomon that has a good potential of large volume of iron ore. FMG has the capabilities of adapting
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• Mining operation sustainability that will be supported by the preservation of the mining environment. FMG is actively funding a research project that is being conducted by the University of Western Australia and the Department of Environment and Conservation in Pilbara.
• Additional cost advantage for FMG. FMG’s infrastructure is not a subject to government regulation under competition laws unlikely with its main rivals Rio and BHP Billiton.
• There will be an increase demand of steel in Chinese market due to urban expansion by 2025 and this will be an excellent opportunity for FMG to obtain a higher income.
• The development of VTEC that gives opportunity for aboriginal group for education and employment.
Threats:
• The intense competition between other companies such as Rio Tinto and BHP Billiton and the partnership of the two companies in the operation in Pilbara will be a significant factor in the competition in the iron ore industry.
• The new generations are becoming more concern of the carbon emissions thus a strict environment approach will be needed by the FMG to continue its mining operation in the future and may call for a higher