Iron ore industry at crossroad, Fortescue founder Andrew Forrest declares
Billionaire Andrew Forrest says young Australian men are under the mistaken impression that nuclear energy is ‘pretty cool’.
Fortescue executive chairman Andrew Forrest has hit out at the Coalition’s nuclear energy policy ahead of the federal election, and warned the economy-defining iron ore industry is at a crossroad.
On nuclear energy, the billionaire businessman and philanthropist said: “I know that young males think nuclear is pretty cool, but all I can say is that’s until they’re educated.
“That’s until they told ‘actually, it’s not cool’. It’s highly expensive to build. It’s almost impossible to take down, and its power costs are nothing fancy at all. And why would you do it (when) you’ve got sun and wind?”
Mr Forrest was speaking at a business breakfast at the Crown Casino in Perth on Thursday. Opposition leader Peter Dutton, who is due to speak at the same venue on Friday, has staked his hopes of winning the election on a gas reservation and nuclear power policy.
The Fortescue founder has pulled back on an ambitious plan to become a global force in green hydrogen in the past year but remains convinced Australia’s future rests with solar and wind farms.
Dr Forrest said he was “really close to the nuclear industry” and knew it well after 20 years of considering the merits of small nuclear reactors, which were “still as far away now as they were then”.
The Coalition has said its plan to build seven nuclear power stations across Australia would be $263bn cheaper than Labor’s renewables-only approach to transforming energy supply.
Dr Forrest, whose family company owns one of Australia’s largest renewable energy developers, questioned why taxpayers should fund nuclear power stations if the private sector wasn’t willing to take on the “massive risk”.
“All I say to my friends on both sides (of politics), is get with the best technology, get with what is happening today. Here we have choices, but make the best one. It’s not nuclear,” he said.
On iron ore, Dr Forrest said Fortescue and other iron ore miners in WA’s Pilbara faced issues with declining grades and impurities as higher quality product started to flow from Africa.
He is staking Fortescue future on turning its mining operations green by 2030 and producing green iron using energy sourced from vast company-owned solar farms in the Pilbara.
Dr Forrest said change was imminent based on “the low grade of our ore in the Pilbara and the high impurities of our ore in the Pilbara” and “the massive threat coming from Africa – sponsored by our customer China – of high grade”.
Fortescue is persisting with a high-grade iron ore project in Gabon, despite making slow progress since celebrating a first shipment from the African nation about 18 months ago.
The company has also shipped higher volumes of lower grade iron ore from WA than it hoped in recent times. It has faced ongoing problems with the Iron Bridge magnetite operations, and the Eliwana mine has not produced higher grade ore in the volumes originally anticipated.
Meanwhile, Rio Tinto and its Chinese partners expect first production from the Simandou iron ore project in Guinea later this year.
Dr Fortescue said China wanted a green iron solution and predicted “hundreds of thousands” of job losses as blast furnace steel mills in its cities were shutdown.
“The momentum in China to do this and across the board to do this is very serious. If we don’t do it, Brazil is going to pick this up. They’ve got massive hydro (power) and, by the way, very large iron ore deposits,” he said.
“Saudi Arabia will pick this up because they’ll just ship it in. They’ll use questionable labour practices – ‘look the other way, baby’ – and they’ll produce green iron shipped in. Or we could do it with proper, modern labour practices and great technology.”
Fortescue expects to produce green iron from a pilot plant in Pilbara by the end of the year and is studying a move to producing a million tonnes a year.
BHP, Rio, BlueScope and Woodside are partners in a separate green iron project at Kwinana south of Perth.
“When a huge new supply of a much higher grade product is coming straight into your market, then the right thing to do is change,” Dr Forrest said of the rise of Africa and the challenge faced by the Australian iron ore industry.
“If we stick with the future we thought we had, we’re going to be in the past … the old iron ore sector will fall.”
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