Fortescue Strikes Deal With Chinese Energy Giant on Net Zero Push

The move was announced during the United Nations General Assembly in New York.

Fortescue Metals chairman Andrew Forrest during a visit to the Christmas Creek mine site in The Pilbara, Western Australia on Apr. 15, 2021. AAP Image/Pool, Justin Benson-Cooper

Prominent Australian energy and green mining company Fortescue has joined forces with Chinese multinational Envision Energy.

The move was announced during the United Nations General Assembly in New York on Sept. 26 (AEST).

Fortescue says Envision Energy will bring advanced experience in wind turbines, energy storage. and digital management as it moves towards a planned target of net zero by 2030.

In a statement, Fortescue said the “fight against climate change” couldn’t be won without international collaboration.

“The world once benefited from open trade and cooperation; now it is divided,” Fortescue executive chairman and founder Andrew Forrest said.

“Fortescue is showing that industry can help glue back that multilateral spirit, not through rhetoric, but through practical alliances that prove heavy industry can follow a new path—one where profits rise as emissions fall.

“China is scaling and manufacturing green technologies at unprecedented speed, and our partnerships give Fortescue access to that capability.”

Fortescue says it has built an international base of counterparts across Spain, Germany, the U.S., the UK, and Australia.

“This is a truly multilateral collaboration that draws on the best ideas and manufacturing capacity to deliver the lowest cost energy and tackle climate change,” Forrest said.

“By joining forces across continents, we are seizing the full extent of the decarbonisation opportunity and rebuilding the cooperation the world needs to address the climate crisis.”

Ties With China

It is not the first partnership the company has made with Chinese companies.

An agreement between Xuzhou Construction Machinery Group (XCMG) means the company will supply up to half of Fortescue’s fleet of 300-400 battery-powered 240-tonne mining trucks.

Deliveries of the vehicles are expected to start from 2028 to 2030.

The agreement builds on Fortescue’s earlier deal, where XCMG will supply battery ancillary mining equipment.

Loan Secured

In August, Fortescue announced it had secured a 14.2 billion Renminbi (US$2 billion) loan from a range of Chinese, Australian, and other international lenders.

Fortescue said the loan—arranged and funded by the Bank of China and Industrial and Commercial Bank of China—was the first time an Australian company had been financed in Chinese currency.

Fortescue is a core supplier of iron ore to China and says it has a “long-standing relationship with China.”

Proceeds from the five-year loan, which carries a fixed interest rate of 3.8 percent, will be used for general corporate purposes and to support Fortescue’s ambitious decarbonisation agenda.

This includes partnerships with Chinese suppliers and technology firms.