Fortescue: Andrew Forrest’s new green energy use, export goals

Billionaire Andrew Forrest is trialling three new energy projects designed to replace more than a billion litres of diesel a year and make his company carbon neutral 10 years ahead of schedule.

Andrew Forrest. Picture: Marie Nirme

Mining billionaire Andrew Forrest’s iron ore operations will be carbon neutral by 2030 with the addition of five new “stretch” projects which will also underpin Fortescue’s ambition to become a clean energy exporter.

By the end of June, Fortescue will trial green hydrogen, ammonia and battery technology to replace more than a billion litres of fossil fuel consumed per year, investors in the ASX-listed $63bn mining giant were told on Monday.

Iron ore trucks at Fortescue’s mining operations in Pilbara, WA. Picture /Bloomberg

Fortescue wants to develop a ship design powered by green ammonia, test large battery technology in its haul trucks, trial hydrogen fuel cell power for drill rigs, test technology on its locomotives to run on green ammonia and conduct trials to use renewable energy in the Pilbara to convert iron ore to green iron at low temperatures, without coal.

The projects, which will run across the group’s plant and mobile fleet, will help Fortescue move from being a major consumer of fossil fuel – nearing more than a billion litres a year of diesel – to a major clean and renewable energy exporter.

Outlining the new projects, Mr Forrest, said it was a “historical day” for the group, which is leading the world, not only the mining industry and heavy industry sectors in commercialising green energy within the sector.

“We have joined the global battle to defeat climate change,” he said.

“We are trialling and demonstrating green hydrogen technologies in global-scale commercial environments, while also rapidly evolving into a green hydrogen and electricity producer of similar scale.

“Our commitment to demonstrate green hydrogen’s economic value in world-scale operations, and become a major energy exporter, while implementing the considerable facilities to support both, means that Fortescue has emerged not simply as a thought-leader and investor, but uniquely as an executor of major green hydrogen projects.”

He expected hydrogen to be in commercial use in Australia by 2023.

“Our aim is to provide the two “missing links” in the climate change battle, to create both the demand and the supply of green hydrogen and green ammonia.“

He also didn’t shy away from ambitions to turn steel producer.

“I think we have a chance of Fortescue being on the leading edge of that, it has the resources, iron ore, energy, technology, and the people to give the world something it really needs.”

However, he said resources would remain at the heart of all its plans.

“While our green energy and industry initiatives may one day significantly outscale our iron ore business due to the global demand for renewable energy, our commitment to iron ore and resources globally remains indefeasible,” said Mr Forrest.

The resources sector was changing at a “violent pace”, he said.

“I think all of us in the resources sector, including colleagues in coal industry, know that change is coming.

“You are seeing change happening in front of your eyes,” he said, referring to recent news of the closure of the Victoria’s Yalloun coal-fired plant by 2028.

Fortescue did not say how much hydrogen would be needed to replace its fuel usage, saying it was still calculating the numbers.

“But our operating costs will fall not rise (as a result of hydrogen usage),” Mr Forrest said.

Fortescue Future Industries (FFI), a wholly owned subsidiary of Fortescue, is driving the development of green electricity, green hydrogen and green ammonia projects.

FFI, which will receive 10 per cent of future profits from Fortescue towards its projects, aims to build 235 gigawatts of installed energy capacity in Australia and overseas – about five times the current capacity of Australia’s National Energy Market.

The new projects, which are in addition to Fortescue’s investment in the Chichester Solar Gas Hybrid Project and Pilbara Energy Connect program will contribute to the “world’s inexorable march to carbon neutrality”, Fortescue chief executive officer Elizabeth Gaines said.

“Fortescue will establish that the major steel, truck, train, ship and mobile plant industries can be operated with renewable, environmentally friendly energy,” she said.

“This will be possible as a result of these groundbreaking Fortescue trials.”

Independent verification will be undertaken on the company carbon neutrality plans and the emissions targets will also be incorporated into its formal remuneration structure, including short and long-term incentives.

Ms Gaines confirmed its underdevelopment $3.4bn mine Iron Bridge, which is currently under review due to a cost blowout, will be part of its carbon neutral plans.