Andrew Forrest, The Aussie Metals Billionnaire-turned Green Investor

“Our organisations will be going like crazy because for us it’s a minimum $50 billion expenditure,” said Fortescue Metals Group’s billionaire founder Andrew Forrest this week while referring to a major agreement, as per which his Australian iron ore mining company will produce 10 million tonnes of hydrogen for German energy giant E.ON.

Fortescue later clarified in a statement that the $50 billion figure was a “high-level assessment by the chairman of what such a major project may cost” and that the company had made no commitment to such an expenditure as of yet. Nevertheless, the latest landmark deal is expected to help decarbonise thousands of medium-sized enterprises in Germany, the Netherlands and other cities where EON distributes energy to more than 50 million customers.

Born in Perth, Australia, as the youngest of three children, Andrew Forrest grew up on a remote Australian cattle station, working as a jackeroo on the family ranch. After overcoming his childhood stutter at school, he went on to graduate with a double major in politics and economics from the University of Western Australia before building a career in investment banking, mining and agriculture. Forrest started his first mining company, Anaconda Nickel (now called Minara Resources), in 1994. Nine years later, he founded Fortescue Metals Group, which mines and ships iron ore to China.

According to the Financial Review, Forrest was the richest person in Australia in 2008. Regarded as its biggest philanthropist, he made the country’s largest-ever donation in 2019, gifting A$655 million to a variety of causes. With an assessed net worth of A$27.25 billion, according to the Financial Review 2021 Rich List, Forrest was ranked as the second richest Australian.

Investing in sustainable energy projects, Forrest is now focused on repositioning his iron ore company into a renewable powerhouse through Fortescue Future Industries (FII), its green energy subsidiary, to produce steel in Australia. Fortescue, which aims to become carbon-neutral by 2030, has committed to invest 10 per cent of its profits into FFI, estimated to be $US1 billion this year. Since it was set up in 2018, FII has announced a string of ambitious green energy projects, and it plans to deploy money alongside other investors.

In October 2021, FII and US firm Plug Power announced a joint venture to manufacture energy infrastructure and equipment, such as proton-exchange membrane (PEM) electrolyzers, cabling and wind turbines, at Aldoga, west of Gladstone, Queensland. Also in October 2021, FII and Incitec Pivot announced a feasibility study for a new ammonium nitrate production plant in Brisbane. The plant would use PEM electrolyzers to generate hydrogen to produce ammonium nitrate, mainly used as fertilizer and as a component in explosives, replacing the conventional manufacturing process using natural gas. FFI revealed in January this year that it expects to spend between $400 million and $600 million this financial year to develop green trains, trucks and shipping, as well as decarbonisation technologies.

Notably, FII expects to expand its green hydrogen production to 15 million tonnes per year by 2030. The cost of an electrolyser used to make hydrogen is less than a quarter of what it was a couple of years ago, Forrest has said. This reduction in the cost base, combined with large capital funds keen to invest in carbon reduction schemes, makes it financially achievable to turn Fortescue into a green energy corporation, he believes.

In March, Forrest announced that he is investing Australian Dollar $3 billion ($2.2 billion) in renewable energy in the island country. Most of the projects for RE will be coming up in the Central Queensland region. He has set an ambitious target of transforming Fortescue Metals into a high-tech start-up. The purpose of the transformation is to produce five times more renewable energy than the Australian power grid. The group also wants to sell hydrogen to the factories and mills of the world.

In his vision, the world needs at least 5,000 GW of clean energy to arrest climate change challenges and he is ready to provide capital and technology to generate at least 1000 GW. Fortescue has plans to produce 15 million tonnes of green hydrogen by 2030, expandable to 50 million tonnes later. That means a massive requirement for renewable energy to power the electrolysers, at between 2-3 GW per electrolyser. The company intends to sign a long-term deal to supply German chemicals maker Covestro with green hydrogen and its derivatives. FFI will supply the equivalent of up to 100,000 tonnes of green hydrogen per year once the deal is formalised, it said on its website.

“Green hydrogen is the way out of global warming,” Andrew Forrest has said in the past. “We don’t intend to lose money out of turning Fortescue green,” the iron ore magnate added.