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

Fortescue’s board has green-lit plans to pour almost $1 billion into yet another green energy project in the Pilbara as it looks to take advantage of growing demand for clean power, particularly for data centres.

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, already has facility 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 founder and chair Andrew Forrest said the miner was engaging with interested parties and would develop this project with key partners, including government and traditional custodians.

“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,” Mr 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.

“This is about replicating our Decarbonisation Green Grid, delivering new green electrons at a scale and speed to market not able to be replicated by fossil fuel.

“It enables a pathway for new industries to operate fossil fuel free, cheaper and faster than traditional alternatives.”

The latest investment comes just two weeks after Fortescue said it was targeting “diesel elimination” and would bring forward a green energy grid to power its enormous Pilbara operations by years.

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 its own “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.

Shipment from its higher-grade Iron Bridge 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.

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 metals and operations chief executive Dino Otranto said it was a solid quarter, highlighting plans to fast-track its decarbonisation efforts.

“Given volatility in global energy markets, there’s never been a clearer reason why this matters,” Mr Otranto saidf.

“For us, it’s about strengthening energy security, lowering costs and eliminating emissions. The build-out of our green grid is well underway, with 630MW of solar and 133MW of wind generation under construction.

“As we bring this online, we’re fundamentally reshaping how we power our operations by cutting our reliance on fossil fuels, at a time when energy supply is increasingly uncertain.”

Fortescue left full-year shipment guidance unchanged at between 195mt and 205mt.