Fortescue Metals Business CEO: China is one of the most important parts of Fortescue’s success story

On November 6, Fortescue’s Shanghai office is the office location with the largest number of people in China for Fortescue, the world’s fourth largest iron ore producer. Entering the office, FMG’s new logo, a light green ring, is prominently displayed in various locations in the office. Many employees of the company also wear brooches designed with FMG’s new logo on their clothes, and Fortescue Metal Business CEO Dino Otranto is no exception.
Expectation: The recovery of China-Australia relations provides new opportunities for deepening cooperation
“I think this trip was the most impressive and impressive trip for me. Then I also saw the huge changes in China, including my personal and our company’s rapid development of China and the impact of China on the entire world. All positions in the market are respected and admired,” Dino said. He told reporters that this was his first visit to China since he became CEO of FMG’s metal business, and he had visited China many times before. Previously, Dino also worked and studied in China for a period of time
The day before, Dino attended a dinner hosted by Australian Prime Minister Anthony Albanese during his visit to China. Dino told reporters that this is the first visit to China by an Australian prime minister-level leader in many years. “This is a very encouraging phenomenon, or a good momentum. Because from the government level it has clearly reiterated the economic complementarity and trade complementarity between China and Australia. In fact, it is what the two governments want to see. We have arrived, and we hope to continue to persist. From a business perspective, including our selling iron ore to China, purchasing equipment from China, etc., there is also great complementarity, so we are still full of confidence in the future. .”
Dino said that FMG’s long-term cooperation history with China is a very unique secret or experience for the company’s success. Although we started in the Pilbara region, we have been working with Chinese companies since our establishment. “China has helped us a lot throughout our successful journey and will always be an important part of our success story. And we are also looking forward to future cooperation.”
Transformation: From a single metal business to a “metal + energy” two-wheel drive
Dino told reporters that his trip to China has another purpose, which is to attend the celebration of the 20th anniversary of the founding of FMG. And 2023 also coincides with the 15th anniversary of FMG’s first iron ore shipment arriving in China. According to reports, Fortescue has supplied more than 1.87 billion tons of iron ore to China so far.
In fact, at this important time point of the 20th anniversary of FMG’s founding, FMG’s replacement of a new logo also contains another layer of meaning – that is FMG’s green energy transformation. According to reports, the design of the new green ring logo is inspired by the tires of mining trucks driving in mines. The green ring also contains FMG’s beautiful vision of green ecology and green earth, which means that FMG is no longer a traditional iron ore mine. Stone producer.
In fact, FMG established FFI two years ago and began to make some internal and external business adjustments. According to the introduction, FMG has determined its company’s latest organizational structure this year: the company’s business is divided into two major segments: Fortescue Metals and Fortescue Energy, so as to match the strategic goals and operations of each business segment. FMG’s metal business is the traditional business that FMG mainly carried out before with iron ore as its core. Fortescue’s energy business consists of three major businesses: Fortescue Future Industries (development and production of green energy projects), Fortescue WAE (technology development and manufacturing of batteries and fleets), and Fortescue Hydrogen Energy Systems (development and manufacturing of electrolyzers and hydrogen energy production systems). Business composition.
“Our chairman, Andrew Forrest, believes that there are huge business opportunities in green energy and green technology, just like he saw in the iron ore business 20 years ago, and he hopes to replicate the success of iron ore in the past 20 years. Successful experiences will be used to develop green energy and green technology industries,” Dino said.
Regarding the relationship between the metal business sector and the energy sector, Dino described it as “keeping pace with each other”, and he himself is the person in charge of the metal business. He told reporters that in the early stage, the metal business segment will provide the company with sufficient cash flow to support the development of the energy segment; while the energy segment will feed back the iron ore business and help decarbonize the steelmaking and ironmaking processes. For the metal business segment and the energy segment, FMG has also set up a “sharing team”, which is mainly responsible for linking the metal and energy businesses, providing resource support for the two, and sharing good solutions between the two.
It is reported that in the field of energy business, FMG has been making continuous moves in recent years. It has launched a number of businesses in Australia, the United States, Norway, Brazil and Kenya, including batteries, green hydrogen, etc., and has cooperated with China Baowu, Primetals, Austria China Steel Federation and others are exploring green and low-carbon iron and steelmaking and other businesses.
Leapfrogging: From “green mine” to “green steel”
Dino told reporters that one of the purposes of this visit to China also includes an exchange and cooperation with the top management of China Baowu, the world’s largest steel company. On June 13 this year, FMG has signed a memorandum of understanding on cooperation with China Baowu. According to the cooperation memorandum, the two parties will use FMG’s and green hydrogen resources to jointly explore low-carbon ironmaking technology and conduct research and development in iron ore beneficiation and Active cooperation is carried out in areas such as renewable energy and green hydrogen. Just in March this year, FMG Group also signed the “Memorandum of Understanding on the Advanced Green Energy Technology Supply Chain System Cooperation Project” with Hunan to accelerate the high-quality development of the province’s new energy equipment industry.
There is huge potential for cooperation between Australia and China. Australia naturally has a large amount of solar and wind energy, and FMG can convert these renewable energies into more convenient hydrogen energy and ammonia energy, and export them to China to help China’s steel industry green and low-carbon transformation, and even Moving away from fossil fuels and making cities more sustainable.
Andrew Forrest said when attending the Global Economic Development and Security Forum of the Boao Forum for Asia: “The world needs strong climate leaders, and the Chinese government has such leadership. In the adoption of comprehensive climate change, strong growth, and the ability to promote the development of manufacturing China has a huge advantage when it comes to economic solutions.
Andrew Forrest further pointed out that in the past few years, China’s industrial development has not slowed down, but has been far ahead in technology, green automation, robotics and manufacturing. It is also particularly strong in areas such as renewable energy – wind, electric vehicles, batteries and solar – and green hydrogen electrolysers.
Dino believes that China is also the source of major innovative technologies in green and low-carbon energy. Data shows that China’s investment in green energy actually reached US$546 billion last year, which is actually four times that of the United States. “Not only in terms of demand for iron ore, but also in terms of green manufacturing, green equipment manufacturing and technology research and development, China is also a global leader. We cherish this opportunity very much, which is the future demand for green energy or green steel. , FMG can not only produce green iron ore, but also provide green energy, which will actually have unlimited opportunities for us in the future.” Dino said.
Achieving low-carbon steelmaking and improving the grade of iron ore entering the furnace is regarded as one of the most important aspects of long-process steelmaking. FMG has always produced varieties with a slightly lower grade than the mainstream 62%. Dino told reporters that the Iron Bridge project that FMG put into production this year is a turning point. Since the start of this project, FMG has officially entered the field of high-grade iron ore production. “In particular, we believe that the magnetite from the Iron Bridge project will make a very positive contribution to future production efficiency or green steel and help our steel companies achieve carbon emission reductions.” Regarding the Iron Bridge project, Dino told reporters, The production of high-grade magnet powder will begin in May 2023, and the first batch of powder will be shipped in July 2023. The project has started daily operation and production in August 2023, and is expected to gradually increase production to reach capacity in the next 24 months. After reaching capacity, it will achieve an annual output of 22 million tons.
At present, the Iron Bridge Project is a core project in the metal sector. The first goal is to ensure that the project can reach production safely and efficiently. If the demand for iron ore is strong in the future, it is possible to expand the production capacity of the Iron Bridge Project. In addition, FMG also has a Bélinga project in Gabon, with the goal of ensuring that FMG’s future iron ore product portfolio enters the high-grade market. Fortescue signed a development agreement with the Gabonese government in February this year and owns approximately three-quarters of the project. The remainder is held by the UAE-registered Africa Transformation and Industrialization Fund and the Gabonese government. Fortescue has committed to investing US$200 million in the early development of the mine this year and next.
In addition to improving the grade of iron ore from resources to promote green and low-carbon, FMG is also committed to achieving green and low-carbon from the technical process route. Dino told reporters that FMG has formed a team of relevant technical personnel, and its main task is to find a suitable technical path to effectively upgrade existing low-grade ore resources into high-grade iron ore.
Fortescue’s decarbonization strategy is also considered very “radical” by the industry. FMG announced its carbon emission reduction goal as early as June 2020, which is to reduce the absolute carbon emissions of existing operating businesses by 26% by 2030 based on 2020, and achieve net zero emissions from operating businesses by 2040. In March 2021, FMG Group Chairman Andrew Forrest updated this goal on behalf of the board of directors, announcing that the group would achieve the goal of carbon neutrality by 2030, ten years earlier than the previous goal.
Dino introduced that Fortescue’s decarbonization plan is divided into three stages: the first stage will announce the investment amount and plan in the entire process; the second stage will guide heavy trucks and drilling rigs to achieve orderly decarbonization; the third stage will link all green The power generation network achieves net-zero emissions in all aspects.