Japanese investment house Mitsui targets Australian hydrogen for climate change vision
With $16bn already invested in Australia’s resources industry, Japan’s Mitsui is looking towards Australia’s growing hydrogen industry.
Japanese investment house Mitsui & Co is looking at investing in Australia’s growing hydrogen industry as part of its vision to tackle climate change issues with local partners, building on the $16bn it has put in to the local resource sector over the past decade.
In his first media interview since taking over as chief executive of Mitsui & Co Australia last year, Hiroyuki Tsurugi also flagged a potential move into the food processing sector as the Tokyo-based conglomerate seeks new Australian partners to further expand its business into Asian markets.
Mitsui already exports a significant volume of beef from Australia to Japan and other Asian countries and has a 25 per cent stake in local grain accumulation and export business Plum Grove.
“Our aim is to expand our business into Asian markets, perhaps together with Australian partners,’’ Mr Tsurugi told The Australian, noting a focus would be “foodstuffs and agricultural products”, especially meat.
“It is a developing strategy. Starting from processing and marketing and, depending how it goes, we might think about focusing more downstream.”
He said Australia would continue to be a “very good supply source” of protein for Asia.
Mitsui is the fourth-largest exporter in Australia and has had a long history in the iron ore industry through its investments in projects operated by BHP in the Pilbara region.
Its holding company, Mitsui Coal Holdings, has involvement in several coal projects, while it is also a partner in the North-West Shelf liquefied natural gas project and is developing the Waitsia Stage 2 onshore gas project in Western Australia’s Mid West with the Kerry Stokes-backed Beach Energy.
But like all Japanese trading houses, Mitsui’s upstream investments are being challenged by the Japanese government’s push for a 2050 net zero emissions target and pressure from stakeholders to address climate change issues.
“It is important for us to tackle the global issues like climate change together with Australian companies, that would be a good business model for us,’’ Mr Tsurugi said.
“In terms of our investments with our partners, we are trying to minimise or reduce the emissions by bringing in technologies.”
Mitsui is an investor, alongside French group Engie and Infrastructure Capital Group, in the Australian Renewable Energy Trust, which has exclusive rights to a development pipeline of about 1330 megawatts of wind and solar projects along the eastern seaboard.
They include the 119MW Willogoleche wind farm in South Australia, which Engie and Mitsui started up in late 2019, as well as the Gregory and Warhook solar farms in Queensland and the Silverleaf solar farm in NSW.
But Mr Tsurugi said investments in the nation’s emerging hydrogen industry would also be a priority for Mitsui.
“It is the ideal fuel without any emissions. Its economics are not (at present) for commercial use but we are participating with a company in New Zealand to build green hydrogen products.
“We are looking at similar opportunities in Australia. Australia gives us a big opportunity with land and renewable energy sources,’’ he said.
Last June Mitsui signed a strategic agreement with New Zealand’s first company dedicated to the supply of green hydrogen, Hiringa Energy. The companies will jointly pursue hydrogen-related commercial projects as hydrogen refuelling stations come online throughout New Zealand in 2021.
In Australia, Mitsui also has a joint venture with another Japanese firm, construction and mining equipment manufacturer Komatsu, which has the largest truck fleet company in Australia and employs 3000 staff locally.
Komatsu Australia chief executive Sean Taylor said ESG (environmental, social and governance) issues were a focus for the firm and that it was looking at the electrification of smaller construction machines.
“We want to work closely with battery technology as that develops around the world and bring that into our machines. We are working closely with the mining companies (for example BHP and Rio Tinto) in Australia on that,’’ Mr Taylor said.
He said Komatsu was also focused on the digitisation of workflows.
Mitsui itself has invested in Position Partners, an Australian provider of positioning and machine control solutions for surveying, civil works and building activities, to accelerate digital transformation in the resource and construction sectors.
“That business model can be easily transitioned to Asian countries,’’ Mr Tsurugi said.
A former Mitsui Oil Exploration chief executive, Mr Tsurugi said he supported the comments of the new Japanese ambassador to Australia, Yamagami Shingo, on Australia’s growing trade disputes with China.
The ambassador said he admired Australia’s willingness to stand firm in the face of Beijing’s pressure.
“I agree with him,’’ Mr Tsurugi said. “The Japan and Australia relationship is at its best. It is not the product of any special event and occasion. We have nurtured trust between the two countries for a very long time. Australia and Japan have their own merit for making it even stronger.”
Scott Morrison, who was the first foreign leader to visit Japanese Prime Minister Yoshihide Suga at home last November, has talked up Australia’s opportunity to grow its commercial and trade relationship with Japan as it seeks to reshape its economy in the rebound from COVID-19.
A free-trade agreement between Japan and Australia came into effect in 2015.
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