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Australia’s Fortescue is planning to increase its procurement activities in China, which remains its largest market for steelmaking materials. As the fourth-largest iron ore producer worldwide, the company is stepping up its investment in eco-friendly technologies.
China is expected to continue being the primary destination for Fortescue’s iron ore exports over the next twenty years, while also serving as a vital sourcing hub, according to senior executives from the Perth-based company.
Global mining companies, including Fortescue, are heavily investing in innovations aimed at reducing greenhouse gas emissions, recognizing the steel and mining industries as significant contributors to climate change.
In 2022, Fortescue launched a $6.2 billion plan to cut its carbon footprint, with $800 million already invested in these efforts, according to the CFO. For the fiscal years ending September 2026, the company intends to dedicate an additional $900 million to $1.2 billion toward decarbonization initiatives. These projects will encompass proven technologies, power generation, energy storage, and a green mining fleet.
The company plans to continuously expand its procurement activities in China, citing advantages such as lower costs, faster delivery, and technological innovation from Chinese suppliers. The focus will be on acquiring green mining equipment and renewable energy systems, including solar, wind, and energy storage solutions from local companies.
Fortescue’s chief of growth and energy emphasized China’s pivotal role in decarbonizing the sector due to its rapid development of new energy and next-generation technologies.
A notable example is the company’s agreement with Chinese heavy machinery manufacturer XCMG Group signed late last year. Under this deal, XCMG will supply more than 100 zero-emission heavy mining vehicles for Fortescue’s operations in Western Australia’s Pilbara region by 2030. Valued at over $400 million, this is the largest international mining equipment order in XCMG’s history.
In addition to XCMG, Fortescue is strengthening collaborations with other Chinese partners to improve environmental performance and product quality. In June 2023, it signed a memorandum of understanding with China Baowu Steel Group to jointly develop low-carbon ironmaking technologies. This partnership encompasses iron ore beneficiation, renewable energy, and green hydrogen initiatives.
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