FMG chairman Dr Andrew Forrest delivered his address virtually from Glasgow, where he is attending the COP26 conference on behalf of FMG and its energy arm, Fortescue Future Industries.

FFI wants to use green hydrogen, green ammonia and green electricity to decarbonise FMG's mining operations and become a global energy player in its own right, aiming to produce 15 million tonnes of green hydrogen per year by 2030. 

Forrest pointed to the recent offtake agreement signed with manufacturer JCB and Ryze Hydrogen in the UK last week, and hinted at an incoming offtake agreement with an aviation fuel company to emphasise that the demand for green hydrogen was already here, and that it represented a prime opportunity, for the planet and for shareholders. 

"I want to assure you, my fellow shareholders, the interest in the bulk purchases now, now that we've committed to produce it and our customers all over the world can see us doing it. That demand is coming from everywhere," Forrest said. 

Nearly every question asked by shareholders present was relating to FFI and how exactly they plan to turn Forrest's vision into reality and how it will turn a profit. 

Asked about recent reports estimating that FFI's financial commitments with various companies and nations reaching around A$100 billion, FMG CEO Elizabeth Gaines dismissed the idea that all of those commitments would be funded immediately and reiterated that FFI and FMG's cost structure would be kept separate. 

"We've said all along that any projects developed by FFI will have their own funding sources secured without recourse for dispute," she said. 

"So we're protecting Fortescue and Fortescue's balance sheet, but there's a significant opportunity." 

She emphasised that FFI's goal first and foremost was to decarbonise its parent company, saying the profits would come from the premium customers will pay for their zero-emissions products. 

"If you think about our goal to become carbon neutral by 2030, we see that as a significant commercial opportunity for Fortescue to generate more profits to lower our costs and get a premium for our iron ore, which will be green," she said.

Gaines noted that not decarbonising could risk the company facing steeper costs as future government's and regulatory bodies looking to cut emissions. 

The first green hydrogen the company will produce will be from an electrolyser and refuelling station at its Christmas Creek mining operation in the Pilbara, used to refuel the hydrogen fuel-cell coaches the company has purchased from Hyzon Motors to transport workers. 

A key decarbonisation goal for the company is to replace the roughly 700 million litres of diesel it uses every year by 2030 across its truck and train and shipping fleets. 

One shareholder asked whether the company had factored the price differential of replacing hydrogen with diesel and whether it would actually be cheaper, with Gaines answering that it would be in the long term, as the company expects energy commodities to remain volatile for some time. 

"You'd have to do your own cost estimate of the cost of diesel by then [2030] I imagine it would be significant given the volatility that we're already seeing," she said. 

"Our goal is to actually make sure that this is better for us both in a mission sense but also in an overall costs sense."

One of FFI's first announced projects was its development of a 250MW green ammonia project Bell Bay, Tasmania sourcing green electricity from the state's vast quantities of hydropower dams. 

Final investment decision was originally slated for this year however it has since been pushed back to the first half of 2022 as the company is bogged down in electricity and water price negotiations with the Tasmanian government. 

"Those negotiations are ongoing, and any delay is a result of those negotiations but we've done everything we need to do in terms of our assessment of working with contractors, working with engagement, making sure we've got all the building blocks in place to make sure we have a very successful project," Gaines told Energy News. 

Meanwhile the company has maintained its capital allocation guidance for FFI at around US$400-600 million.