Fortescue will spend $6.2 billion to rid iron ore operations of fossil fuels by 2030

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  • Investment to save $818 million per year from 2030 in operational costs
  • Cumulative operational savings of $3 billion by 2030

Sep 20 (Reuters) – Australian group Fortescue Metals (FMG.AX) said on Tuesday it would spend around $6.2 billion to phase out the use of fossil fuels and achieve “true zero earth emissions”. in its iron ore operations by the end of the decade.

The investment includes the Perth-based miner installing an additional 2-3 gigawatts of renewable power generation and battery storage, as well as the additional costs associated with bolstering its green mining fleets and locomotives.

Largely planned for fiscal years 2024 to 2028, the investment will displace approximately 700 million liters of diesel and 15 million gigajoules of gas per year by 2030, and prevent the emission of 3 million tonnes of carbon dioxide equivalent per year, the miner said.

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The world’s fourth-largest iron ore producer forecasts cumulative operational savings of $3 billion by 2030 with a return on investment by 2034, and plans to save $818 million in costs per year from 2030.

Actual zero land emissions refer to direct and indirect emissions from company operations and the generation of purchased electricity, steam, among others.

Fortescue and its green energy unit Fortescue Future Industries (FFI) are trying to rapidly develop infrastructure and technology to produce green hydrogen, as the miner transitions from a pure iron ore producer to an iron ore company. green energy. (https://reut.rs/3xDzJ1g)

The miner, led by chairman and iron ore magnate Andrew Forrest, has planned between $600 million and $700 million of capital expenditure for FFI in fiscal 2023 to build an all-green hydrogen supply chain by the end of the decade, potentially positioning itself as a key alternative fuel player. (https://reut.rs/3BTin2Q) (https://reut.rs/3DC95JP)

“There is no doubt that the energy landscape has changed dramatically over the past two years and that change has accelerated since Russia invaded Ukraine,” Forrest said on Tuesday. (https://bit.ly/3f3jt2R)

The miner expects “attractive economic returns” on operating cost savings after eliminating diesel, natural gas and carbon offset purchases from its supply chain, it added.

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Reporting by Sameer Manekar in Bengaluru; Editing by Maju Samuel

Our standards: The Thomson Reuters Trust Principles.

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