Billionaire Andrew Forrest broke into the ranks of the world’s top iron ore exporters, now he’s targeting an entry into renewables in as soon as two years under an ambitious plan to produce more energy than giants like Chevron Corp.
Forrest’s Fortescue Metals Group Ltd. will begin green fuel production in 2022 or 2023 and aims to eventually develop 235 gigawatts of clean energy — equal to about a fifth of the U.S.’s total generation capacity — utilizing wind and solar and moving into hydrogen and ammonia production, he said in a Bloomberg TV interview.
“We reached a decision that there was enough renewable energy in the world to last mankind for all time,” Forrest, Fortescue’s chairman and founder, said Monday. “We just had to apply the technology and the scale which we’ve done successfully at Fortescue to make sure renewable fuel competes against fossil fuels.”
The Perth-based company, which began iron ore exports in 2008 and is now the world’s No.4 shipper, will invest about A$1 billion ($732 million) in de-carbonization and hydrogen projects out to 2023. Forrest did not offer a forecast on when the company would meet its energy capacity target, or give further details on a strategy to fund the expansion.
Forrest’s plan is aimed at becoming an energy supplier to carbon-intensive industry sectors, including steelmaking, that are under increasing pressure from governments and investors to shrink their greenhouse gas emissions. It also comes as energy majors including BP Plc and Royal Dutch Shell Plc seek to boost the share of renewables in their portfolios.
“We are looking to have a ship leaving our ports about every 30 minutes and to really supply the world’s heavy industry,” Forrest said in the interview. “We are all looking for major, regular supply of renewable fuels and Fortescue is on track to supply that.”
At the targeted scale, Fortescue’s energy business would likely be more valuable than its iron ore operations, which in August posted annual earnings of $4.7 billion, according to Forrest. The company has held talks on power projects in 31 countries and has discussions planned in a further 16 nations, he said. Development of the energy business will include cooperation with both the U.S and China.
An initial focus will be on Australia, where Fortescue is transitioning its iron ore operations to renewable power, and will then target to do the same to its rail, port and shipping networks.
“The renewable energy industry could be just as big, if not a larger employer of people in Australia than the coal industry,” Forrest said. The country’s coal sector has a workforce of about 50,000 people, according to government data.