Fortescue has inked a new partnership with China Baowu Steel Group that could propel the decarbonisation of the global steel industry.
The memorandum of understanding (MoU) signed with Baowu Resources aims to accelerate the development of green iron technology, aligning with Fortescue’s strategy with growing global demand for sustainable steelmaking.
“We are committed to building a green iron supply chain,” Fortescue chief operating officer Shelley Robertson said, as reported by Reuters.
“The partnership with China Baowu will help further accelerate the development of green iron technology and ensure that we will be able to meet growing demand for green iron in and outside China.”
It comes after Fortescue began works on its Christmas Creek green metal project in WA in August 2024, which is set to produce over 1500 tonnes of green metal annually from 2025.
Using green hydrogen and renewable energy to create sponge iron, Fortescue is progressing toward its 2030 goal of making all its iron ore products green.
Fortescue is embracing new sustainable methods such as green metal as it leads the way in the transition to low-carbon operations, a shift increasingly recognised as essential for long-term profitability.
The Baowu MoU also solidifies Fortescue’s ties with China, its largest export market, with Baowu one of the world’s largest steelmakers.
This ensures Fortescue remains a preferred supplier of green iron as China intensifies its decarbonisation efforts.
Strengthening this relationship is vital to sustaining Australia’s estimated $138 billion iron ore export industry, particularly as global steelmakers seek greener alternatives.
A report from late 2024 by Climate Energy Finance (CEF) said Australia could miss out on $70 billion a year in export revenue if it does not pivot to green iron quickly enough as countries like China decarbonise their supply chains.
Australia could double its export revenue to $250 billion according to CEF by becoming a world leader in green iron.
Fortescue’s proactive response not only safeguards its market share but also enhances its potential to deliver shareholder value through future-focused initiatives.
With a growing emphasis on ESG principles in investment decisions, Fortescue’s commitment to green innovation could make it a standout opportunity in the evolving resource sector.
Now it’s just a matter of Fortescue pulling through with all of its commitments.
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