Fortescue Metals Group has announced that its Board has approved Final Investment Decision (FID) on three major green projects: the Gladstone PEM50 Project in Queensland, a Green Iron Trial Commercial Plant in Western Australia and the Phoenix Hydrogen Hub in the US.
The estimated total investment in the three approved projects is approximately US$750 million over the next three years.
These are three of the first green hydrogen deals ever to be progressed to FID in Australia and the US, with a pipeline of projects to follow which is set to significantly scale-up Fortescue’s global green energy production, with lessons learnt from these first three projects.
Fortescue said the projects represent the diversity its Board was targeting, which is to prove green hydrogen commercial scale production in the US, electrolyser capacity and performance in Queensland and new pure green ironmaking in Western Australia.
Final Investment Decisions
Gladstone PEM50 Project
A 50MW green hydrogen project utilising Fortescue’s own electrolyser technology. Total investment is up to US$150 million, with first production in 2025.
Christmas Creek Green Iron Trial Commercial Plant
Utilising existing green hydrogen and green electricity from solar generation, hematite and magnetite ore production capacity and existing infrastructure and technical capacity. An investment of up US$50 million has been approved to construct a Green Iron Trial Commercial Plant at Christmas Creek. Annual production is more than 1,500t, with first production expected in 2025.
Phoenix Hydrogen Hub
An 80MW electrolyser and liquefaction facility in Arizona, USA with production capacity of up to 11,000t per annum of liquid green hydrogen. Total investment is approximately US$550 million, with first production expected in 2026. With its commercial attraction confirmed, a phase two development exists.
A number of other projects have been selected to be fast tracked by the Board, including Pecem in Brazil, Project Chui in Kenya and Holmaneset in Norway, representing a geographical and technological diversity.
Fortescue Energy CEO, Mark Hutchinson, said that diversity in technology and geography at conservative scales for Fortescue projects reflects its disciplined approach to learning through action, prior to large scale investments.
“The Phoenix Hydrogen Hub establishes Fortescue in one of the most attractive energy markets in the world, facilitated by the Inflation Reduction Act,” Mr Hutchinson said.
“The proximity to California, a primary heavy haulage trucking route and the most progressive US state to adopt and incentivise clean hydrogen, primes Fortescue well to deliver value into the US domestic market.
“The Gladstone PEM50 Project in Queensland will produce hydrogen at an industrial scale, allowing us to demonstrate the high quality of Fortescue’s own hydrogen systems.
“With a disciplined approach to capital allocation, we continue to target double-digit project returns. This is the start of a pipeline of green energy projects we are dedicated to delivering.”
Fortescue Metals CEO, Dino Otranto, said that Fortescue is taking a proactive approach to green iron, including embracing innovative technologies that will help it step away from the use of fossil fuels.
“We are confident that our approach will drive growth for Fortescue through new, high value products being sold into new markets, ultimately leading to an increase in the number of iron units we sell.”
