Fortescue Metals CEO Urges Australia to Match Global Clean Energy Incentives

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Fortescue Future Industries (FFI), the energy unit of Fortescue Metals Group, has announced five projects it wants to develop as it seeks to become a leading clean energy producer. 

FFI plans to build 300-megawatt facilities in Norway and Kenya that will use hydropower and geothermal energy to produce green hydrogen, which will be used to make ammonia. The Norwegian project will export the ammonia to Europe, while it will be used as fertiliser in Kenya. In the US, FFI will produce green hydrogen for energy.

FFI CEO Mark Hutchinson has urged the Australian government to match energy policies with other countries, including Germany, to take advantage of the country’s green energy sector. This follows the introduction of the US Inflation Reduction Act, which has seen policy responses from several countries, including the European Union, Canada, Gulf states and India.

“What we would love to see is really some incentives being built into a bilateral (deal) with certain countries, for example, Germany,” Mr Hutchinson said.

Fortescue posted steady iron ore shipments in the March quarter and cost blowouts. The company retained its full-year shipment guidance despite a cyclone that disrupted exports from Australia’s iron ore hub. 

Shares fell by as much as 5.3%, outpacing the broader mining sector, amid a decline in iron ore prices to near four-month lows on demand concerns. Following delays and cost blowouts, the company produced the first wet concentrate from its Iron Bridge Magnetite processing facility in Western Australia on 22 April. 

It did not confirm if shipments would go ahead by June. Fortescue shipped 46.3 million metric tonnes of the steel-making commodity in Q1 2023, compared to 46.5 million tonnes a year earlier. It retained its shipment guidance for the year to June 2023 at 187-192 million tonnes. The company’s direct production costs of iron ore rose to $17.73 per wet metric tonne in Q1 2023 from $15.78 in the same period last year.

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