The economic climate has been turbulent to say the least in 2022, with operating costs reaching extreme highs in the global resources sector. But Fortescue Metals Group has a plan to flip the script.
The major miner has set a target to spend $US6.2 billion ($9.16 billion) to eliminate the use of fossil fuels and hit its 2030 net-zero target, where it initially hopes to achieve carbon neutrality for Scope 1 and 2 emissions by the end of the decade.
This is a significant capital outlay, but Fortescue believes it will lead to a handsome return on investment.
“The ($US6.2 billion) investment will be highly positive for shareholders and displace the equivalent of one billion litres of diesel every year by 2030,” Fortescue executive chair Andrew Forrest said at the company’s recent annual general meeting (AGM).
“At market prices, we will save $US3 billion by 2030, so a net investment is only $US3.2 billion, and we continue to save over $US800 million a year, every year.
“If we’re not buying the filthy stuff; if we continue to just buy oil and gas, our own modelling shows we will blow up $US17 billion of your capital while busily destroying the planet for your children.
“That’s what we’ll do if we don’t change, close to $US17 billion and the environment.”
Planned to roll out primarily between the 2023–24 financial year and 2027–28 financial year, Fortescue’s $US6.2 billion investment includes the deployment of a further 2–3 gigawatts of renewable energy generation and battery storage, and the continued rollout of a green mining fleet and locomotives.
Forrest said the deployment of green energy will not only save the company in reduced energy costs, but will also enable it to steer clear of carbon taxes.
“We will avoid fossil fuel price risk,” he said. “We will avoid Putin risk, we’ll avoid deep risks of carbon taxes and escalating carbon credits, while capital markets will clammer after us and dry up for those who insist on their operations while destroying the planet.”
Through its green energy arm, Fortescue Future Industries, the ASX50 company has been rolling out announcement after announcement of new renewable aspirations.
This includes a partnership with Liebherr, where Fortescue will purchase a fleet of 120 zero-emission haul trucks from the global original equipment manufacturer (OEM).
Fortescue is also looking to develop the world’s first regenerating battery electric iron ore train.