Australia’s Fortescue Metals Group said on Tuesday it
would spend an estimated $6.2 billion to eliminate the use of fossil fuels and
achieve “real zero terrestrial emissions” across its iron ore operations by the
end of the decade.
The investment includes the Perth-based miner
installing an additional 2-3 gigawatts of renewable energy generation and
battery storage, as well as incremental costs associated with beefing up its
green mining fleets and locomotives.
Largely planned in fiscal years 2024 to 2028, the
investment will enable displacement of about 700 million litres of diesel and
15 million gigajoules of gas per annum by 2030, and prevent emission of 3
million tonnes of carbon dioxide equivalent per year, the miner said.
The world’s fourth-largest iron ore producer
anticipates cumulative operational savings of $3 billion by 2030 with payback
on investment by 2034, and expects to save $818 million in costs per year from
Real zero terrestrial emissions refer to direct and
indirect emissions from the firm’s operations and from generation of purchased
electricity, steam, among others.
Fortescue and its green-energy unit Fortescue Future
Industries (FFI) are trying to rapidly develop infrastructure and technology to
produce green hydrogen, as the miner transitions from a pure-play iron ore
producer to a green energy firm.
The miner, led by chairman and iron ore magnate
Andrew Forrest, has chalked in $600 million to $700 million in capital expense
for FFI in fiscal 2023 to build a full green hydrogen supply chain by the end
of the decade, potentially positioning itself as a key player in supply of the
“There’s no doubt that the energy landscape has
changed dramatically over the past two years and this change has accelerated
since Russia invaded Ukraine,” Forrest said on Tuesday.
The miner expects “attractive economic returns” on operating
cost savings after eliminating diesel, natural gas, and carbon offset purchases
from its supply chain, it added.