Fortescue’s Gladstone hydrogen project labelled ‘fantasy’ amid grant dispute
Queensland says Fortescue hasn’t repaid $66m in taxpayer funds for its abandoned hydrogen plant, Andrew Forrest claims that’s because no will return his phone call to sort out how, and the federal government has refused to reveal the status of its $45m hand out.
The Queensland government has labelled the Gladstone green hydrogen gigafactory promoted and then abandoned by Fortescue a “fantasy project” as wrangling continues over how much in taxpayer funding the Andrew Forrest-led company will repay.
The iron ore miner has yet to repay any of about $110m in Federal and Queensland government funding despite officially walking away from the much-hyped green hydrogen projects in July.
Queensland deputy premier Jarrod Bleijie is adamant Fortescue repay in full a $65.97m grant while the Albanese government has put a cloak of secrecy around how much it expects to recoup from a $45m grant.
Dr Forrest has accused Mr Bleijie of not returning calls and suggested the politician was partly to blame for holding up a repayment deal.
However, that claim is disputed. It is understood Mr Bleijie has never had any direct contact with Dr Forrest or his office on the issue, and never been asked to return a call.
Mr Bleijie hit back at Fortescue on Tuesday and made it clear the Crisafulli government wanted all of the money handed to the company returned. He also blasted the former Labor government for backing the now defunct project.
“The government remains in negotiations to recover taxpayer funds handed out to yet another Labor fantasy project during their decade of decline,” he said.
“Unlike Labor, the Crisafulli Government respects Queensland taxpayers’ money and we expect proponents to payback what they owe when they don’t deliver.”
Mr Bleijie said described the funding, approved by Labor’s then cabinet budget review committee, as a “sweetheart deal” with Fortescue.
Dr Forrest made confusing and ambiguous remarks about Fortescue repaying the taxpayer funding when questioned of the sidelines of the company’s annual general meeting in Perth last Friday.
Asked if Fortescue had repaid any money, Dr Forrest said: “Yeah, so with the Feds, I wouldn’t call it repaid. Everyone does a deal on this. We’re very happy to go into something if it’s got a chance of being commercial.
“(The) Government says: ‘Hang on, can we trip you over the edge? You’ll invest quarter of a billion dollars, we’ll invest whatever it is, a fraction of that’.
“We had a proper crack, so we’ll pay back, like we have the Feds, every cent which is due.”
Asked a second time for money had been repaid, he said: “Yeah, I think we’ve agreed to a lot of money to the Feds, and we’re just waiting to sort it out for the Queensland Government. The deputy premier just needs to return the call to my office. That’d help.”
Fortescue has since declined to answer questions about what it considers “every cent which is due” and whether it intends to repay the Federal and Queensland grants in full.
A Fortescue spokeswoman said: “We have reached an in-principal agreement to refund the Federal government in line with our contractual obligations. We are in discussions with the Queensland government and will repay every dollar required under our agreement.”
Federal Industry minister Tim Ayres refused to answer questions about the issue, any agreement and how much of the taxpayer grant handed to Fortescue it wanted returned.
All Mr Ayres would say through a spokeswoman was that his department was “working constructively with Fortescue to finalise repayment arrangements through the mutual termination process, in accordance with the terms of the grant agreement”.
“The department is responsible for managing the grant and its termination and has the necessary expertise to ensure compliance is met within the agreement,” the Ayres spokeswoman said.
Mr Ayres’ office referred The Australian to the Department of Industry, Science and Resources which refused to answer any question or comment on the taxpayer funds issued under the modern manufacturing initiative.
Fortescue promoted Gladstone as being able to produce up to 22 tonnes of hydrogen a day using electrolyser technology developed in-house.
The project was part-built was opened in 2024 and put into mothballs in May this year when about 90 staff were cut from Fortescue’s floundering hydrogen division.
Fortescue officially abandoned the never-completed project in July along with a hydrogen project in the US state of Arizona, a move it blamed on policy changes under the Trump administration. It has flagged a $227 million impairment on the tow projects.
The Perth-headquartered company has also ploughed more than $1bn into its floundering Fortescue Zero business based in the UK where hundreds of workers are being sacked.
Dr Forrest, who is in Brazil along with key members of the Fortescue leadership team for the global climate summit known as COP30, did not mention hydrogen when he spoke to shareholders for 25 minutes at last Friday’s AGM, and it was not mentioned a company presentation filed with the ASX.
He did foreshadow more failures on green energy projects as happened with Gladstone.
“We treat every single day as a chance to improve, to push the values to trial crazy plan As, which probably will fail, because we have bulletproof plan Bs,” he told the AGM.
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