13 November 2017

The Companies Officer Australian Stock Exchange Ltd Level 40, Central Park

152 - 158 St Georges Terrace

Perth WA 6000

Dear Sir/Madam

TERMINATION OF AGREEMENT FOR SOUTH HEDLAND POWER STATION

Fortescue Metals Group Ltd (ASX: FMG, Fortescue) refers to its announcement on 1 August 2017, regarding TransAlta Corporation's (TAX:TA, NYSE:TAC) obligations under the South Hedland Power Purchase Agreement.

Discussions between Fortescue and TransAlta have failed to reach a satisfactory outcome. Fortescue is not satisfied that the performance conditions under the South Hedland Power Purchase Agreement have been met and accordingly, Fortescue has today issued a notice of termination to TransAlta and its related entities.

The security of power supply to Fortescue's Port Hedland operations is critical. Satisfaction of the performance conditions under the South Hedland Power Purchase Agreement is key to ensuring the continued performance of those operations.

Fortescue continues to obtain full power supply from other suppliers for its operations in Port Hedland.

Fortescue Metals Group Ltd

Alison Terry

Company Secretary

Media contact:

Michael Vaughan, Fivemark Partners E: mediarelations@fmgl.com.au M: 0422 602 720

Fortescue Metals Group Limited PO Box 6915

ABN 57 002 594 872 East Perth, Western Australia

Level 2, 87 Adelaide Terrace P +61 8 6218 8888 East Perth, Western Australia 6004 E fmgl@fmgl.com.au

Fortescue Metals Group Ltd. published this content on 13 November 2017 and is solely responsible for the information contained herein.
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