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Fortescue buoyant on China iron-ore as it advances green pivot

31st October 2023

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Chinese demand for Australian iron-ore will remain strong despite the nation’s disappointing post-pandemic recovery, according to Fortescue Metals Group, the world’s fourth-biggest producer.

“We’ve seen demand from China over the last 10, 20 years be particularly robust for our product,” Fortescue Metals CEO Dino Otranto said Tuesday in an interview with Bloomberg TV at the Imarc conference in Sydney. “I’m confident that the demand will continue to be there.”

China accounts for the bulk of Australia’s A$124-billion iron-ore export sector and Fortescue’s earnings. The Perth-based company has gone through a turbulent period since founder Andrew Forrest — Australia’s richest person — retook the reins last year to accelerate its shift to green energy, culminating in the recent exit of three high-profile executives including Otranto’s predecessor, Fiona Hick.

Fortescue has industry-leading plans to completely cut all emissions from its own operations, known as Scope 1 and Scope 2, by 2030 and broaden that to include pollution from its customers, known as Scope 3, by 2040. China is seen as key to that ambition, Otranto said.

“China will play an even more critical role for us in developing the renewable technology in solar and wind and getting that cost down — to ensure that we can all decarbonize our operations profitably,” Otranto said.

Otranto sees the company’s green energy business eventually eclipsing its resources arm, and said that a number of its first energy projects will be presented to the board “imminently.”

Edited by Bloomberg

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