While the whole world was shocked into a pandemic-induced lockdown in 2020, the billionaire chairman of Australian mining giant Fortescue, Andrew Forrest — nicknamed Twiggy — was searching for green hydrogen partnerships.
In August 2020, the company launched Fortescue Future Industries (FFI), which looks to its plans to decarbonise by 2030 and to become a global producer of green products, ranging from green iron ore to green hydrogen and green ammonia.
“We didn’t want Covid-19 to stop our plans and in fact we used Covid to our advantage,” says Julie Shuttleworth, CEO of FFI, explaining how she, Mr Forrest and a team of experts established connections with 47 countries.
The move follows a decade of discussing hydrogen possibilities and the signing, in 2018, of a $20m five-year agreement with the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia’s national science agency, to develop hydrogen technologies.
FFI is supporting its metals parent company, Fortescue, to decarbonise by 2030. For this, it is looking to build three to four gigawatts (GW) of wind and solar energy in the Pilbara, Western Australia, which will power its mining, rail and port operations, from its stationary energy to its haul trucks. The trucks themselves will be powered by either batteries or green hydrogen.
“We’ve already demonstrated that hydrogen fuel cell technology works on a haul truck and drill rig, and [we’ve] run ammonia in a locomotive and pilot-size ship engine. The next step is to turn these technology demonstrators into prototypes that run on our mining sites,” Ms Shuttleworth says.
The need for change in the mining sector is self-evident. Mining is responsible for between 4% and 7% of greenhouse gas emissions, according to McKinsey, so its decarbonisation is essential if the world is to limit global warming to below 2.0° Celsius.
This August, Anglo-Australian multinational metals and mining company Rio Tinto announced it will trial Japan-based manufacturer Komatsu’s zero-emission hauling trucks in its mining operations.
Ms Shuttleworth believes FFI beat its competitors to the punch on sustainability best practices. “A big part of this is to lead by example. The world’s warming. If we don’t do anything, we’ll be using 1 billion litres of diesel by 2030 ourselves, so we need to abate that and take action.”
Global green hydrogen producer
On top of decarbonising the operations of its parent company, FFI’s objective is to become a fully-fledged producer of green hydrogen. The company wants to produce 15 million tonnes per year of green hydrogen by 2030, for which it estimates more than 150GW of renewable resources will be needed.
Ms Shuttleworth concedes it is an ambitious target. “The reason we’ve set that target is because, following conversations with government officials, companies, off-takers and customers in South Korea, Japan, Europe and North America, our chairman saw there was strong demand for green hydrogen but nobody is making it,” she says.
“Some of our first projects will likely be green ammonia because you can easily transport ammonia. In the future, they will be designed so that you can export liquid hydrogen, if that’s what the customer needs, or as a liquid organic carrier, if that’s what the customer needs. We’re very open to different transport vectors,” she adds.
With more than 300GW of identified projects, FFI has signed numerous projects and agreements with governments and businesses around the world, from Papua New Guinea and India to the Democratic Republic of Congo (DRC) and Russia.
In India, FFI has partnered with a subsidiary of JSW Energy for projects including production of hydrogen and decarbonise steelmaking in the country. In Russia, the company is in discussions with the government over a green hydrogen production project, while in the DRC, FFI is also in talks to develop the Grand Inga hydroelectric power expansion project. Once developed, it would be the world’s largest hydroelectric project, with a capacity forecast to exceed 40GW.
There is now an opportunity to create a green industry and many jobs for local communities and businesses in these countries, Ms Shuttleworth says, highlighting that countries with hydropower resources are more favourable for green hydrogen projects as they provide high capacity factor with low operating costs.
“Now, obviously, many of these are in very early stages and they’re not all necessarily going to progress,” she says, but adds “they definitely are realistic” and that innovation and scaling up will help drive the cost of green hydrogen down.
Not everybody is convinced, however. Runeel Daliah, senior analyst at advisory firm Lux Research, says: “For one single company to produce [15 million tonnes of] hydrogen by 2030 will not only require remarkable investment but also a significant ramp-up of the electrolyser manufacturing supply chain.”
As it is, he continues, the first gigafactories for electrolysers are only coming online now. “We don’t foresee Fortescue reaching that goal in just eight years. The company set its sights on the right technology for decarbonising its operations but will likely have to tamper down expectations,” Mr Daliah says.
Admit it, fix it
Asked about the scepticism surrounding Fortescue’s ambitions, Ms Shuttleworth recalls that in 2003 when Fortescue was created, nobody believed it would eventually be shipping iron ore to China.
“We had to do the exploration, we had to get the funds, we had to build a mine, we had to build a 100 kilometre-long railway, and a port and get contracts in place. That was all done in record time, in less than five years,” she says.
“We’re not a company that just sits around. We actually get on and take action and what we’ve achieved by June 30 in just 130 days is a clear example of that” — she cites the hydrogen fuel cell truck, a hydrogen fuel cell drill rig and operating ammonia in a locomotive engine.
“Businesses have to lead by example. We can’t just rely on governments to set policies. It’s huge emitters like us that have to do something. Admit it first, and then get on with fixing it.”
This article first appeared in the October/November print edition of fDi Intelligence. View a digital edition of the magazine here.