Green energy downsizing won’t derail Fortescue’s transition, according to Forrest.
Andrew Forrest, Fortescue’s billionaire chairman, cautions that Chinese firms are modernizing plants and shifting to cleaner iron ore, leaving Australian miners vulnerable if they don’t adapt.
As the major shareholder of Australia’s third-largest iron ore producer behind BHP and Rio Tinto, Forrest notes all three miners face declining ore quality in aging Pilbara mines. He reveals Chinese buyers are increasingly favoring higher-grade deposits from Africa and Brazil instead.
“They are going to shut down the old-fashioned, two-century-old technology of burning sticks and logs, putting in coal, putting in iron ore, burning it all and sending up masses of pollution into the atmosphere and producing steel,” he told the Financial Review Mining Summit in Perth.
“They’re looking straight into a future that may or may not include Western Australia. China will base its green steel industry on other ores that are specific to Brazil or Africa, but not specific to our lower grades,” he added.
Western Australia remains the world’s top iron ore exporter, while China absorbs 72% of global supply (per the latest Industry Department data). Though 2024 exports grew modestly (+1.2%), officials predict production will hit its ceiling within three years.
“Rio Tinto, BHP, they talk a big game, but everyone is going down,” Forrest said. “The choice is getting made now, and we don’t have any time to lose to have an iron ore industry which is going to deliver what the customer wants, which is green metal … or they will get it somewhere else.”
A wave of high-grade iron ore from Guinea’s Simandou project is poised to enter the market, offering steelmakers superior material for lower-emission steel production. This new supply could disrupt traditional trade flows as producers seek cleaner inputs.
Forrest said that, “Issues like pollution are still very politically sensitive over there and politically important. As soon as they have a choice, they are bringing in renewables at a speed the world has never seen. They are quickly moving away from coal [for energy production]. It’s frightening. And they’re producing more renewable energy and building more renewable energy than the rest of the world combined.”
While Fortescue has scaled down some renewable initiatives, including recent layoffs affecting 90 hydrogen project staff in Queensland and Western Australia, Chairman Andrew Forrest maintains his long-term clean energy vision.
“I know the news cycles are pretty short, so it’s so easy to believe the hype – you don’t walk away from hydrogen,” he told the summit. “That is just complete rubbish. Every time that article has been printed, Fortescue continues to double down on hydrogen.”