Why has the FMG share price stumbled today?
Shares in mining giant Fortescue Metals have continued their falls, now down 21% in the last six months.
Shares in iron ore major Fortescue Metals Group (ASX: FMG) are among the top traded shares on the ASX on Friday, but also stumbled in early trading, slipping more than 2% before recovering some ground.
The stock was still down 0.8% at $18.10 at the time of writing.
Why has the FMG stock price slipped today
Shares in Australia's third-largest iron ore exporter have slipped after the company's surprise announcement that chief executive officer Elizabeth Gaines would step down after less than four years in the role.
Ms Gaines, who joined Fortescue's board in 2013 and was appointed CEO of the company in February 2018, will remain as a non-executive director and also continue to act as its global green hydrogen brand ambassador.
Fortescue did not specify the reasons for the decision, but the departure of its CEO comes amid a massive push by billionaire founder Andrew Forrest to diversify into renewable energy.
"The search, with Elizabeth, for a CEO and an even deeper management bench is an enormous opportunity for a talented and visionary executive team, to continue the successful leadership of Fortescue, as we deliver on our strategy to diversify Fortescue to a renewable energy and resources company," he said in a statement to the ASX.
Mr Forrest said in Sydney that Fortescue's next CEO would be chosen on the basis of their ability to help transform the company from a pure-play iron ore producer into a diversified energy company and miner.
Like other miners, the company's shares have reflected the impact of a more than 50% slide in iron ore price in the last few months. But investors have found reason to cheer its increasing focus on renewables energy through the Fortescue Future Industries (FFI) subsidiary, at a time when global decarbonisation efforts have been under the spotlight.
A spate of announcements in recent months indicate the group is seeing vast economic potential in the sector. FFI announced the construction of a green energy manufacturing centre at Gladstone in Queensland with an initial capacity of two gigawatts at its electrolyser factory.
It has also signed initial agreements with JCB and Ryze Hydrogen to potentially become the UK's biggest supplier of green hydrogen, with plans to produce 15 million tonnes a year of the green fuel by 2030, and 50 million tonnes a year in the next decade.
FFI is also looking to develop seven hydropower projects and 11 geothermal energy projects in Papua New Guinea to generate renewable energy for the production of green hydrogen and green ammonia.
Still, the shock exit of a CEO who helped successfully navigate the company through the coronavirus pandemic and helped deliver record breaking profits in FY20 and FY21 has definitely unnerved the market, and investors would be hoping the impact is only temporary.
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