Fortescue invests US$750 million in green energy projects
Fortescue, one of the world’s largest iron ore producers, has decided to change its business direction and focus on clean energy. To this end, the company has invested US$750 million in three projects that will be the first step in expanding its operations. Previously, the company specialised exclusively in iron ore mining.
As part of its new strategy, Fortescue is implementing three projects:
– An electrolyser and hydrogen plant in Arizona. The total investment is US$550 million.
– Hydrogen fuel plants in Queensland, Australia.
– An environmentally friendly pig iron plant in Western Australia. The alloy will be used to make carbon-free steel.
Strengthening the energy division will go hand in hand with higher investments at Fortescue. The company’s analysts estimate it will increase by US$100 million to US$500 million by June 2024. At the same time, spending in the metallurgical division will remain unchanged at around US$3.2 billion.
Regarding investment in new projects, the allocation of funds will be over 3 years. In addition to the businesses outlined, the company plans to invest in other promising clean energy ideas. Among them:
– a fertiliser plant in Kenya;
– a green hydrogen production plant in Brazil;
– ammonia production facilities in Norway.
Andrew Forrest, the company’s founder, wants to make what are currently considered the most polluting industries environmentally neutral. But many experts are sceptical about such plans. They say Fortescue will find it extremely difficult to implement its outlined projects. In addition, there must be sufficient demand for these green products, such as environmentally friendly pig iron or hydrogen, for the business to work.
Fortescue business overview
Australian company Fortescue was known as iron ore producer Fortescue Metals Group until July 2023. Now, the company is actively expanding its green energy business to reduce its reliance on fossil fuels.
Since 2017, Fortescue has been exploring and mining precious metals and minerals in Australia and South America. The company is particularly interested in gold, lithium and copper.
In addition, from 2021, the business structure includes a company engaged in energy projects in different countries. It operates solar power plants, ammonium nitrate production facilities and equipment for hydrogen plants.
Argentina will commission a green hydrogen plant by 2024. Its initial capacity will be 600 MW, rising to 15 GW by 2030.
