Andrew Forrest’s Fortescue bets another $1b on green energy with 200MW Pilbara Green Energy Project

Fortescue’s board will pour almost $1b into yet another green energy project, this time to take advantage of “insatiable” data centre demand, all the while uncertainty grows over its crucial green iron plans. The miner on Friday said the 200 megawatt Pilbara Green Energy Project would come with a price tag of $US680 million ($953m) and deliver a fully integrated, off-grid renewable energy system and large-scale battery storage and firming capability. It is expected to be completed by 2028, with a pathway to multi-gigawatt expansion beyond 2030. The latest move in Fortescue’s multibillion-dollar efforts to build out its renewable energy infrastructure in the Pilbara comes amid surging demand for clean energy to power data centres. NextDC, a $9.2b Australian data centre operator, has facilities in Port Hedland and Newman that have been purpose-built to support the high-density digital demands of WA’s mining and resources sector. “Fortescue is already demonstrating in the Pilbara that heavy industry can operate on a fully integrated renewable grid — eliminating fossil fuels while improving cost, reliability and control,” Fortescue founder and chair Andrew Forrest said. “We are now extending this model to new customers, particularly data centres, helping meet one of the fastest growing sources of demand in the world.” Fortescue chief executive Dino Otranto ramped up the rhetoric on an analyst call, labelling green energy demand tied to data centres as “insatiable”. The company’s latest investment comes just two weeks after it brought forward an already aggressive plan to eliminate diesel consumption at its enormous Pilbara operations. Mr Forrest at the time said the miner’s decision in 2022 to convert its entire Australian operations to self-generated green power by December 2030, at an estimated cost of $US6.2b, was an “impossible” target. But now it’s aiming for the end of 2028. The entire grid would include 1.2 gigawatts of solar capacity, more than 600MW of wind generation, and four to five gigawatt hours of battery energy storage, with AI-driven management systems. March quarter update The new green energy spending plan came on the same day Fortescue reported shipments of 48.4 million tonnes of iron ore in the third quarter. That was up 5 per cent on the same period a year earlier but down 4 per cent for the previous quarter. Despite the slip, year-to-date shipments are still at a record 148.7mt. Shipments from its problematic Iron Bridge magnetite project fell 4 per cent from the previous quarter to 2mt, with production and exports impacted by weather disruptions related to tropical cyclones Mitchell and Narelle. Iron Bridge export guidance was cut to between 9mt and 10Mt, from 10mt and 12mt. Unit costs fell 4 per cent in the three months to the end of March to $US18.29 per wet metric tonne. Fortescue achieved average realised prices of $US92/t for its lower-grade iron ore but $US122 for its magnetite concentrate from iron Bridge. It ended March with a cash balance of $US4.2b and net debt of $US1.6b. Fortescue left full-year shipment guidance unchanged at between 195mt and 205mt. But more uncertainty clouds the miner’s Christmas Creek green iron pilot plant project. The project being a success is integral to Mr Forrest’s long-term vision of Fortescue moving further up the steelmaking supply chain to stave off the growing threat of high-grade African iron ore. The pilot plant was supposed to be powered by green hydrogen and churn out first iron late last year. Fortescue on Friday said it expected the Christmas Creek plant to produce first “hot metal” in the June quarter and revealed the project’s original upstream hydrogen reduction circuit was “not being completed at this time”. The mining giant has so far sunk hundreds of millions of dollars into failed green hydrogen projects after hyping up the energy source at the turn of the decade.