Fortescue has turned to a Chinese machinery manufacturer in race to decarbonise its iron ore mines by 2030

Fortescue will spend up to $US400m ($618.2m) on equipment from Xuzhou Construction Machinery Group as it hedges its bets on the electrification of its mining fleet.

Fortescue Metals chief executive Dino Otranto. Picture: Ross Swanborough

Fortescue Limited has turned to a Chinese machinery manufacturer as it races the clock to hit executive chairman Andrew Forrest’s ambitious target to decarbonise the company’s iron ore mines by 2030.

The company will spend up to $US400m ($618.2m) on equipment from Xuzhou Construction Machinery Group as it hedges its bets on the project to electrify its mining fleet.

Unlike Fortescue’s partnership with Europe-based Liebherr, the XCMG machinery will not make use of battery power systems developed by Fortescue Zero.

The off-the-shelf XCMG equipment is expected to start arriving at Fortescue’s mine in the Pilbara in 2026.

The supply contract is XCMG’s largest outside of China for mining equipment and covers the supply more than 100 battery electric wheel loaders, wheel dozers, water carts, float prime movers and graders over four years to 2030.

The deal comes four months after XCMG signed a $US110bn deal with Rio Tinto and its joint venture partners to supply diesel-electric trucks and graders for the Simandou iron ore project in Guinea.

Fortescue has budgeted $US6.2bn to achieve a switch to renewable energy to decarbonise its iron ore operations, which currently burn about one billion litres of diesel equivalent a year.

Perth-headquartered Fortescue estimates the rollout of the XCMG machinery will cut diesel consumption by about 40,000 litres a year.

Most of the costs associated with purchasing the XCMG equipment will come from Fortescue’s sustaining capital expenditure budget and is aligned with its scheduled asset replacement cycle.

Fortescue Metals chief executive Dino Otranto and XCMG chairman Yang Dongsheng signed the deal at the Bauma China conference in Shanghai.

Mr Otrano said Fortescue was moving rapidly to decarbonise the iron ore operations. To achieve the 2030 target, it would need to “swap out hundreds of pieces of diesel mining equipment at the end of their life with zero-emissions alternatives”.

“As the global mining industry continues to evolve, we’re proud to be at the forefront of driving innovation in value-adding green technology and showing the world that industry can decarbonise,” he said.

Mr Dongsheng said XCMG now offered electric options across its entire product range, with new energy products accounting for 18 per cent of revenue.

In September, Fortescue unveiled a $US2.8bn partnership with Europe-based Liebherr to jointly develop zero-emission mining machinery.

Fortescue expects to purchase about 360 autonomous battery electric trucks, 55 electric excavators and 60 battery powered dozers under the deal with Liebherr.

Liebherr’s role is to build the chassis while the battery power systems will be supplied by Fortescue Zero under a deal that will keep some of mining division expenditure in-house.

Mr Forrest challenged the rest of the mining industry to follow Fortescue’s lead in cementing the deal with Liebherr.

Fortescue Zero started life as Williams Advanced Engineering and was an offshoot of the Williams F1 racing team before being acquired by Fortescue for $US222m in 2022.

A key plank of the Liebherr deal is technology developed by Fortescue that will robotically deploy a 6MW charger, which can charge a haul truck in 30 minutes, providing six hours of run time.