Fortescue Cuts 700 Jobs Leading to Speculation About Green Hydrogen

Billionaire Andrew Forrest raised concerns about skyrocketing energy prices.

The logo of green hydrogen is seen at the 2023 Hannover Messe industrial trade fair in Hanover, Germany on April 17, 2023. Alexander Koerner/Getty Images

Billionaire Andrew Forrest’s mining company, Fortescue, will slash 700 jobs globally and merge its metals and energy divisions.

Despite this, Fortescue is resolute in its goal to be the world’s leading green technology, energy, and metals company.

In a statement to the market, Fortescue said it needs to continually evolve to deliver on its strategy and maximize shareholder value.

“As part of this, approximately 700 people from across Fortescue’s global operations will be offered redundancies, with that process to be finalised by the end of July 2024. Fortescue is grateful for the contribution of all those impacted by the changes,” Fortescue said.

Fortescue explained it is combining its metals and energy divisions, which requires restructuring and cost cuts.

“The company has undergone a period of rapid growth and transition, and as part of bringing together metals and energy into One Fortescue, initiatives are being implemented to simplify its structure, remove duplication, and deliver cost efficiencies,” it said.

Speculation has emerged that Fortescue will put on hold its goal of producing 15 million tonnes of green hydrogen by 2030 until energy prices fall.

However, Mr. Forrest said the vision for Fortescue has not changed in a statement provided to The Epoch Times.

“I truly believe in the power that green hydrogen will unlock for decarbonising hard-to-abate industry. Fortescue will prove this. Our decarbonisation program is world-leading, and our Australian operations will be Real Zero—no fossil fuels—by 2030,” Mr. Forrest said.

“Fortescue is absolutely resolute in our commitment to be the world’s leading green technology, metals and energy company with a laser focus on achieving Real Zero by 2030.”

Mr. Forrest said to do this, Fortescue must continually evolve to ensure it remains lean and impactful.

“We know that without change, improvement is impossible. Being a first mover isn’t easy, but as we learnt 21 years ago, risk is always worth the reward.”

Fortescue Concerned About Sky Rocketing Energy Prices

The founder and executive chairman of Fortescue raised concerns about skyrocketing energy prices and criticized political leaders amid global wars.

“We have watched as weak leaders used Russia’s invasion of Ukraine and war in the Middle East to backslide on their green commitments and use it as yet another pathetic excuse to keep burning fossil fuels,” Mr. Forrest said.

“Energy prices have skyrocketed while we have been hamstrung by fossil fuel. How long will politicians allow this to continue? How long will their indecision or clutching at straws like nuclear continue to drive up the cost of living?”

In a second statement provided to The Epoch Times, Mr. Forrest said Fortescue fully supports the federal government’s green energy ambitions for Australia.

“The government’s $2 kilogram subsidy is absolutely imperative to get our country into a leading position to produce a replacement for oil and gas.”

The subsidy provides $2 for every kilogram of renewable hydrogen for up to ten years, until 2039-40.

At the very least, he said Fortescue’s green iron plans would rely on green hydrogen.

“This can only be economically produced to create the largest economic multiplier Australia has seen for decades through the government’s support to get the green hydrogen industry off the ground,” he said. 

“With this in place, the green hydrogen industry can provide a long-term future of prosperity and employment across Australia.”

Will Green Hydrogen Goals Succeed?

However, Fortescue received some backlash online, with some raising concerns about government subsidies.

One Nation SA Director Jennifer Game said, “The green hydrogen fantasy ends as Fortescue sacks 700 people.”

“Even with government subsidies and production tax credits, it is not possible to make it work when the sun and wind are variable and intermittent,” she said.

The Labor government is committed to net zero by 2050 and 82 percent renewables by 2030. the Coalition, however, plans to build seven nuclear plants.

The federal budget, delivered on May 14, included $6.7 billion in tax incentives for green hydrogen production.

Fortescue’s share price slid slightly, by 1.25 percent at the time of writing on the Australian share market amid the news.  News of the restructure was delivered to the market after close on July 17.

Fortescue has appointed a new chief financial officer, chief operating officer, and company secretary to coincide with the new structure.

Apple Paget will take on the chief financial officer position after 11 months of acting in the role. Shelley Robertson will serve as chief operating officer, while Navdeep (Mona) Gill will be company secretary. All appointments were already working within the company.