Billionaire owner of top mining business reveals plans to enter renewable sector

By Rahul Vaimal, Associate Editor
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Billionaire Andrew Forrest is among the world’s top iron ore exporters

Australian billionaire Andrew Forrest broke into the ranks of the world’s largest exporters of iron ore, and now under an ambitious strategy to generate more energy than giants such as US-based Chevron Corp., he is planning an expansion into renewables within two years.

Fortescue Metals Group Ltd. owned by Mr. Forrest will begin production of green fuel in 2022 or 2023 and plans to gradually produce 235 gigawatts of renewable energy using wind and solar and shift into the production of hydrogen and ammonia, he said.

“We reached a decision that there was enough renewable energy in the world to last mankind for all time. 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,” Mr. Forrest said.

The business is based in Perth, Australia and had started exporting iron ore in 2008 and is now the world’s No. 4 shipper. It will invest approximately $732 million in de-carbonization and hydrogen projects by 2023. Forrest did not provide a forecast on when the company will meet its goal for energy capacity or provide more information on a strategy for funding the expansion.

The objective of Forrest’s initiative is to become an energy supplier to carbon-intensive sectors, including steelmaking, which are under rising pressure to reduce their greenhouse gas emissions from governments and investors. It also comes as energy companies such as BP Plc and Royal Dutch Shell Plc are seeking to increase 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,” Mr. Forrest said. “We are all looking for a major, regular supply of renewable fuels and Fortescue is on track to supply that.”

According to Forrest, Fortescue’s energy business would likely be more valuable on a targeted scale than its iron ore operations, which reported annual earnings of $4.7 billion in August. The business has held talks in 31 countries on power projects and has planned discussions in a further 16 nations, he said. Development of the energy business will include cooperation with both the US 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,” Mr. Forrest said. The country’s coal sector has a workforce of about 50,000 people, according to government data.