Fortescue Metals Group is on a crash course with the fossil fuels sector with a new green energy arm aiming to produce renewable energy at a global scale and cost comparative to traditional energy companies such as Chevron.
Delivering his chairman’s address via video link from Paraguay at the company’s AGM on Wednesday, Andrew Forrest revealed the company would aggressively move into the green energy space with its Fortescue Future Industries arm.
“After scientific and personal analysis of the renewable energy resources of our little planet I can assure you that there is more than enough renewable energy to sustainably and economically supply every person on this planet from this time forth,” he told shareholders of the $53.6 billion company.
The creation of the Fortescue Future Industries is a significant addition to FMG’s portfolio, which has become one of the ASX’s most successful companies as it became one of the world’s lowest cost producers of iron ore.
FFI will finance, develop and operate renewable energy projects including green hydrogen and green ammonia plants.
Dr Forrest revealed FFI would aim to build 235 gigawatts of installed energy capacity – greater than Chevron’s 2019 energy production – and had already committed to $1billion out to 2023.
He said a team of 40, including himself, had already visited 23 countries to buy up renewable energy patents and intellectual property.
“As each project rolls in we will be considering them on their merit and where we establish markets as we did for Fortescue, where we establish independent financing secured only against the assets, exactly like we did with Fortescue, then we will go ahead an fiance and develop those projects,” he said.
“When we as Fortescue, the pioneer, can really lead the way of large volume, low cost, green hydrogen and green ammonia shipped around the world, then you’ll see others join and you will begin to see the commercial driving end of climate change.”
In his pitch to shareholders, Dr Forrest said FFI would apply the same lessons and company culture that made its iron ore business so successful to the global renewable energy sector.
Apart from its Pilbara energy project, Dr Forrest gave few details on specific projects or timeframes but signalled they could include the production of green hydrogen and ammonia, which could be used in shipping, steelmaking and fertilisers.
He said FMG’s balance sheet would be protected in its efforts to move into green energy with each new project secured against the assets.
Climate change and decarbonisation emerged as a common theme at the FMG AGM, which was held in Perth on Tuesday morning.
Dr Forrest said if the world did not arrest climate change, the warming planet would melt permafrost, which would in turn release huge amounts of methane into the atmosphere.
“If we do no arrest the increasing heat in the temperatures of our planet will start to unlock the methane fields and the carbon which occurs and is stored naturally within our geology within our tundras, when that unlocks ladies and gentlemen, climate change will become something we can no longer stop,” he said.
Following the NSW and Victoria fires earlier this year, Dr Forrest attracted criticism for his comments that fuel loads were the main cause of the fires. He later clarified his position that climate change was the main driver of the fires.
Fortescue chief executive Elizabeth Gaines offered more tempered comments on FFI, stating they were ambitious targets and the company was at the “early stages” of assessing the opportunities.
Source: Thanks smh.com