Controversy
Misleading and deceptive conduct court case
In late 2004 and early 2005, Fortescue chairman and then-CEO Andrew Forrest made a series of announcements that Fortescue had entered into "binding agreements" with three significant Chinese state-owned entities to build and finance infrastructure for the company. The Australian Securities & Investments Commission took legal action against FMG and Forrest. Although an initial ruling by Justice John Gilmour in 2009 found Forrest hadn't acted in a misleading or deceptive manner, Chief Justice Patrick Keane and judges Arthur Emmett and Raymond Finkelstein of the Federal Court of Australia overturned this decision in 2011, finding that FMG and its chairman and CEO, Andrew Forrest, had engaged in misleading or deceptive conduct and breached the continuous disclosure provisions in the Corporations Act, 2001, by claiming to have binding contracts with China.
The court found that a Chinese framework agreement does not amount to a binding contract, in the natural meaning of the word. If found to have breached director's duties, Forrest faced the possibility of being banned as a director of an ASIC-listed company. FMG appealed against the decision, and in October 2012, the High Court found in favour of FMG and Forrest, reversing the decision of the full bench of the Federal Court and agreeing with the original 2009 decision by Justice Gilmour. In his judgement, Justice Honour concluded that Fortescue's releases "correctly represented that there was an agreement, and that it was in the view of the parties binding from the time of board approval".
Despite the early announcement, in 2008, the group loaded its first iron ore shipment bound for China. Fortescue have at least ten Chinese steel mill contracts lasting for around ten years. Baosteel was the first company to receive their iron ore.
Yindjibarndi legal case
Since 2008 Fortescue have been in a legal battle with the traditional owners of the Solomon Mine area, the Yindjibarndi people, where Fortescue (then FMG) acquired mining leases and has been mining since 2013. When Fortescue started planning the Solomon Hub, it entered negotiations with the Yindjibarndi Aboriginal corporation. However, the relationship deteriorated in 2007 when the Yindjibarndi people discovered that FMG had the legal authority to destroy their sacred sites and was doing so during the mine's construction.
After the corporation rejected FMG's royalty offer, the miner supported a breakaway group, the Wirlu-Murra Yindjibarndi Aboriginal Corporation, reportedly to facilitate Fortescue's approvals to mine. This group paid individuals $500 each to attend a meeting in 2010, where the deal was approved. Prior to this, the Yindjibarndi Aboriginal Corporation (YAC) had lodged its opposition to the grant of the three licenses to the Native Title Tribunal in 2009, initially failing to win orders preventing the grant of the licenses. The YAC also failed in its initial Federal Court appeal of that decision last year, and the state government issued the mining licenses to FMG in late November 2010. Both FMG and the YAC are now waiting on the results of a new appeal to the Full Bench of the Federal Court. The company estimated the extraction of 2.4 billion tons of ore over the next 40 years, worth $280 billion, offering less than a deal struck by Rio Tinto that would provide $2 billion over 40 years.
On 8 April 2011, Slater & Gordon, representing the Yindjibarndi Aboriginal Corporation in its negotiations with FMG, requested FMG compensate the Yindjibarndi community. In March 2011, FMG was accused of supporting a break-off group to divide the local Yindjibarndi community during negotiations for access to traditional Yinjibarndi land for the planned $8.5 billion Solomon Hub project. While the law firm admitted FMG has put compensation money up, it said it was insufficient in comparison with the profits that will be made from this mine on the client's traditional land, as well as the royalty (tax) amounts that have been paid to non-Aboriginal people.
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In 2021, negotiations over an Indigenous Land Use Agreement failed, and as of May 2022 the Yindjibarndi Aboriginal Corporation is leading a native title compensation claim in the Federal Court, asserting that FMG have been mining on Yindjibarndi land without an agreement. According to the National Native Title Tribunal, the Federal Court needs to make a determination on whether the community is eligible for "compensation for the loss, impairment, diminution or extinguishment of native title rights and interests in the area".
As of 2023, Fortescue had not provided compensation to, or received permission from, the Yindjibarndi people to carry out mining on their land, despite their receiving permission from a larger local Aboriginal corporation, composed of most of the community leaders and elders. Fortescue's operations in the area were said to have destroyed about 250 cultural and sacred sites.
In 2024, the case between Fortescue and Yindjibarndi people continued in the Federal Court. A hearing was held in Roebourne and at a sacred site on Yindjibarndi country, called Bangkangarra, located in the Hamersley Range, in the Pilbara. The Federal Court was informed that a ceremony traditionally used to reconcile the Yindjibarndi people of the Pilbara after disputes had been affected by a division among the traditional owners. During the court hearing on-country, a visibly upset Yindjibarndi elder testified before the Federal Court that Fortescue Metals Group had "stolen" and "destroyed" Yindjibarndi land. Yindjibarndi elder Stanley Warrie wept as he directed Federal Court judge Stephen Burley to observe the red land, now marred by Fortescue’s large metal pipes on the outskirts of its iron ore pit. Warrie told the Federal Court "Fortescue has stolen the land...This is my religion, and it’s been destroyed, my stories, my life. Yindjibarndi land is where my religion is."
During the court case, a senior Yindjibarndi person testified that the land had been so disturbed that it no longer attracted birds, flora, fauna, and sources of traditional food. When asked why, the traditional owner pointed to a mine processing site and stated, "You can see what’s happening here, this infrastructure." He further explained that trucks and cars used at the mine site had disrupted the land.
The court then visited another location – a rock shelter with evidence of occupation dating back 35,000 years – situated beneath an iron ore haulage road. Justice Burnley remarked that he wanted the court to note the "constant and audible sound of vehicles" during the visit.
Fortescue asserted that it does not owe compensation to the Yindjibarndi people, arguing that the responsibility lies with the state of Western Australia, which granted the tenements. The Government of Western Australia disagreed, asserting that the miner is solely responsible.
Both parties then agreed that compensation is owed. This was conveyed to the court during a week-long hearing at the town hall in Roebourne, the same location where negotiations between the Yindjibarndi people and Andrew Forrest broke down in 2011.
Some Yindjibarndi people have stated that the divisions among family and community members resulting from the Fortescue case may be irreparable.
In May 2026, the Federal Court ordered Fortescue to pay $150.1 million in compensation to the Yindjibarndi Ngurra Aboriginal Corporation.
