Forrest-led miner Fortescue dumps hydrogen projects in Arizona, Gladstone and blames Trump

Andrew Forrest-led Fortescue takes another big step back on green hydrogen and flags $220m writedown on abandoned projects.

The new commercial scale hydrogen electrolyser manufacturing facility in Gladstone.

Fortescue has abandoned two of its most-hyped green hydrogen projects but says it is not giving up on plans to decarbonise the company’s core iron ore operations and ambitions to become a major force in renewable energy.

Andrew Forrest-led Fortescue said on Thursday that it ditched plans to spend almost $900m on a hydrogen project in the US state of Arizona, blaming policy changes under the Trump administration for the move.

Fortescue has also officially ditched its part-built green hydrogen project in Gladstone in Queensland that was slated to produce up to 22 tonnes of hydrogen a day using electrolyser technology developed in-house.

The $140m Gladstone plant was opened about 12 months ago but put into mothballs in May when about 90 staff were cut from its floundering hydrogen division. The plant had received about $60m in federal and Queensland government support.

Andrew Forrest and Jo Bamford, owner of Wrightbus, after sealing a trade deal in green hydrogen at COP26 Glasgow in 2021. Picture: Annabel Moeller

Fortescue is estimating a pre-tax writedown of about $US150m ($227m) on the two abandoned green hydrogen projects, and said it was considering what to do with the land attached to the two projects.

Fortescue forecast capital expenditure of $US300m in its energy division in 2025-26 and $US400m on operation expenditure.

Fortescue chief executive Dino Otranto said the company remained on target to decarbonise the iron ore mines in Western Australia’s Pilbara by 2030 despite the setbacks elsewhere in green energy.

In iron ore, Fortescue shipped a record 55 million tonnes from Port Hedland in the June quarter and a record 198 million tonnes for 2024-25.

Fortescue chief executive of growth and energy Gus Pichot told analysts the Pilbara mines were delivering outstanding results with improved performance and efficiency “driven by the push to decarbonise and evolve”.

“Regarding the green energy and hydrogen projects, we set ambitious stretch targets, and while the world has changed significantly, we have not,” he said.

“Being first isn’t always easy, but to succeed, we must remain nimble and frugal with the resources our shareholders have entrusted with us.

“I want to make it clear we are not giving up on green energy, and green hydrogen is key to our future, including our green metals strategy.

“Technology is improving at rapid speed. The cost will come down, and the market will come, but we must also be realistic and disciplined.

“So we reset and evaluate the future and timelines for our global projects to ensure that they are economic, and we deliver value to our shareholders.”

Mr Pichot, a former ­Argentina rugby international, was speaking on a results call for the first time since replacing former energy chief executive Mark Hutchinson.

Fortescue announced in May that Mr Hutchinson and chief operating officer Shelley Robertson were parting ways with the company.

The company flagged this year that the Arizona hydrogen project was under review.

On Arizona, Mr Pichot said a shift in US policy direction under President Donald Trump meant the project was no longer viable.

“A shift in policy priorities away from green energy has changed the situation in the US,” he said.

“The lack of certainty and a step back in green ambition has stopped the emerging green energy markets, making it hard for previously feasible projects to proceed.

“As a result, we cannot proceed with our investments as they stand, and will explore future opportunities for our site in Arizona.”

In regard to the abandoned Gladstone project, Mr Pichot said Fortescue had made a strategic shift away from its once highly touted proton exchange membrane electrolyser technology.

He said it was now focusing on advancing technologies to provide “low-cost hydrogen for green industry in Australia”.

“This change in direction is vital for the progress of our green iron ambitions,” he said.

“However, it means that PEM50 project is no longer needed to test that technology. We will be looking at future opportunities for the site in Gladstone as well.”

Andrew Forrest and Anthony Albanese at a steel decarbonisation roundtable in Shanghai, China. Picture: Joseph Olbrycht-Palmer/NewsWire

The green hydrogen reset came as Mr Otranto hailed an “exceptional” performance at the iron ore mines and continued to talk up the nascent green iron industry on the back of Prime Minister Anthony Albanese’s recent visit to China.

“Having returned from China last week, it’s clear there is strong support from both Australia and China to collaborate on a green iron and steel supply chain which would drive investment, strengthen trade ties and eliminate emissions at scale.” he said.

Fortescue expects to ship 195 million to 205 million tonnes of iron ore in 2025-26, including 10 million to 12 million tonnes from its troubled Iron Bridge magnetite operations.

The company ended June 30 with a cash balance of $US4.3bn and net debt of $US1.1bn.

Originally published as Forrest-led miner Fortescue dumps hydrogen projects in Arizona, Gladstone and blames Trump