Forrest lashes energy majors as Fortescue cops first strike

“They’re spending billions of dollars on oil and gas exploration while promising to keep warming in line with the 1.5 degrees, which we’ve already passed,” Forrest said. “It is selfishness in the extreme to do nothing if you’re entrusted as a leader to stay maniacally glued to supporting fossil fuel.”


Forrest also dismissed a $US6.25 million ($9.5 million) lawsuit filed by US billionaire Paul Tudor Jones over Fortescue’s involvement in clean energy projects that turned sour as a “total non-event,” saying it wouldn’t affect the company.

The iron ore miner turned new energy aspirant told investors it will push ahead with three out of five green hydrogen projects it said in January it intended to approve by the end of this year, spending more than $1.1 billion over the next three years to carve out new markets in the untested energy sector.

Fortescue Energy chief Mark Hutchinson said the company’s board has approved plans to build an 80 megawatt electrolyser and liquefaction facility in Arizona and two other hydrogen projects in Australia. “The proximity to California, a primary heavy haulage trucking route and the most progressive US state to adopt and incentivise clean hydrogen, primes Fortescue well to deliver value into the US domestic market,” Hutchinson said.

The company will also fund a 50 megawatt green hydrogen technology project in Gladstone, Queensland, and build a trial commercial plant to make green iron in West Australia. It claims all three projects are the first green hydrogen deals ever progressed to final investment decision status in the US and Australia.

A pump at a green hydrogen refuelling station.Credit: Bloomberg

The US$750 million ($1.14 billion) commitment over the next three years prompted the company to raise its 2024 capital expenditure guidance for Fortescue Energy by 25 per cent to US$500 million, while leaving its metals group’s 2024 capital expenditure unchanged at $US2.8 billion to $US3.2 billion. Fortescue’s shares closed slightly higher at $25.47.

The challenge to produce commercial quantities of green hydrogen – made by renewables-powered electrolysis – is daunting for Fortescue and other energy providers because the technology to extract hydrogen from water has not been deployed at scale, is costly, and has no established market or infrastructure to sell it.

Forrest, one of the country’s richest men, wants Fortescue to be the world’s biggest producer of green hydrogen, an ambition sceptics say would be better pursued by diverting the vast amounts of renewable power needed to create green hydrogen back into the grid.

Other key hydrogen projects that the company was considering in Norway, Brazil and Kenya haven’t been abandoned, but will instead be fast-tracked by the board to “firmly establish” a path to bolster the company’s green hydrogen production capacity.

Fortescue’s collaboration with fertiliser manufacturer Incitec Pivot to build a green hydrogen and ammonia plant on Gibson Island in Queensland is being hampered by structurally high green electricity costs and Australia’s struggle to “shed its petro-state status,” Hutchinson said.

“We’ve just got to work the whole thing through, to make sure it’s the right deal for shareholders. We didn’t even take it to the board,” he said.

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