‘World first for heavy industry of this scale’: Fortescue boss

Australian iron ore major Fortescue will either “turn down or turn off our operations” when renewable energy isn’t available in a new type of future commodity “demand response”, head of green power, Meheroop Chopra said at The Electric Mine 2024.

“We’re fully committed to a real zero target, which means that we will run our operations when the sun is shining, when the wind is blowing, and we have stored enough energy in our batteries, or green molecules,” Chopra said.

“This also means that we will either turn down or turn off our operations when renewable energy isn’t available, and we call this demand response. It will be a world first for heavy industry of this scale in the iron ore business.”

Chopra said Fortescue’s 2022 commitment to invest A$6.2 billion to “turn our mining operations green by 2030” meant switching off diesel, gas and carbon credits, adding 2-3 gigawatts of wind and solar power generation, and significant battery storage capacity, as well as 750 km of transmission lines. The company would also be reequipping its large mobile mining and rail fleet with non-diesel machines.

“We’re about to commission our first inhouse 100-megawatt solar farm near our Iron Bridge operations midway through this year,” Chopra said. “Over the next seven years we’ll be replacing a diesel-consuming mining fleet, including rail, with non-emitting alternatives. By doing this we will remove 700 million litres of diesel a year from our iron ore operations and save ourselves $3 billion cumulatively between now and 2030.

“We also know that that’s just the tip of the iceberg. We know that as a result of shipping iron ore, and converting this to steel, primarily by the steel mills in Asia, we emit a further 261.5 million tonnes of carbon dioxide equivalent every year. We acknowledge they are significantly larger than our scope one and two [2.5Mt CO2-equivalent]. But in the true spirit of Fortescue, we decided to set ourselves a stretch target to deal with this as well. We will achieve net zero on scope three emissions by 2040.”

Chopra said Fortescue had recently announced final investment decisions on its first two green energy projects.

“We’re also fast tracking a number of major projects globally that will position us as a major supplier of green molecules to the world,” he said.

“We don’t believe anyone in the world is currently doing what we’re doing at the same pace and scale. And by getting our projects underway now, our first mover advantage places us in the best possible position to realise the value of the energy transition. We’re not only doing this because we think it’s the best thing to do for the planet. We believe that it makes true business sense to do so. We believe that decarbonising will deliver greater returns to our shareholders.”

Savings would come not only from the 700 Ml/year diesel consumption cut and the 15 million gigajoules of gas no longer burnt, but also the carbon credits “we will no longer need.”

“All of us here know that fossil fuel volatility is only going to increase,” Chopra said. “Regulatory risk is high and it’s ever increasing and it’s quite unattractive to be exposed to carbon offsets. By decarbonising we’re going to protect ourselves against the volatility while gaining better access to capital markets.”

This story was written by Richard Roberts of InvestMETS, one of The Electric Mine 2024 Supporting Partners