Fortescue secures yuan loan worth $2 billion for green energy plans
A BIG GREEN FU TO TRUMP
Australia’s Fortescue said on Friday it had secured a yuan-denominated loan worth 14.2 billion Chinese yuan ($1.98 billion) to ramp up its decarbonization plans, weeks after scrapping its US and Australian green hydrogen projects.
The loan agreement comes as the world’s fourth-largest iron ore miner reshapes its clean energy portfolio as the United States scales back its priorities on green energy under the Trump administration.
Fortescue announced plans in July to wind up its green hydrogen projects in Arizona, US, and Queensland in Australia, a week after its billionaire founder and chairman, Andrew Forrest, visited China with Australian Prime Minister Anthony Albanese.
On Friday, Forrest, popularly known as Twiggy, lauded China’s industrial scale, innovation, and commitment to investing in green technology, while underscoring his deepening ties with Chinese institutions.
“As the United States steps back from investing in what will be the world’s greatest industry, China and Fortescue are advancing the green technology needed to lead the global green industrial revolution,” Forrest said in a statement.
This financing agreement strengthens Fortescue’s long-standing partnerships with Chinese institutions and opens new frontiers for collaboration, Forrest said.
The five-year syndicated term-loan facility with a 3.8% per annum fixed interest rate is backed by leading Chinese, Australian and international lenders, including Bank of China and ICBC.
The facility is the first of its kind for an Australian company where the use of proceeds is not restricted, a Fortescue spokesperson told Reuters in an emailed response.
Fortescue plans to use the facility for general corporate purposes and its decarbonization plans, the company said.
($1 = 7.1810 Chinese yuan)
(By John Biju, Rishav Chatterjee and Sameer Manekar; Editing by Alan Barona and Subhranshu Sahu)
Rio Tinto says no economic incentive for green steel in Australia
Rio Tinto joined peer BHP on Thursday to play down Australia’s prospects of building out a “green iron” sector that would help decarbonize the steel industry because the country lacks the economic incentives to do so.
Australia is the world’s largest supplier of seaborne iron ore and has been striving to build a role as a reliable source of green metals. In February the government allocated A$1 billion ($652.4 million) to support the manufacture of green iron and its supply chains.
Since Australia’s iron ore is mostly too low-grade to be directly processed into steel with renewable energy, it needs an additional processing step. When this is undertaken with hydrogen made from renewable energy instead of coal, the product is called hydrogen direct reduced iron (DRI) or “green iron”, a low-carbon base for making green steel.
“Today I don’t believe there is an economic incentive for anybody to move to a hydrogen DRI,” Rio Tinto’s chief technical officer Mark Davies said.
The technology was unproven, and there were complications moving from existing processes using natural gas to hydrogen, he told a business lunch in Melbourne.
“And doing it in Australia is expensive. It’s an expensive place to build stuff,” he said.
Major miner BHP said last month it was too costly for Australia to build a “green iron” industry, even after the country and China agreed to jointly work to decarbonize the steel supply chain, responsible for nearly a 10th of global emissions.
A global carbon price of “a couple of hundred dollars” would be needed to create that incentive, Davies later told a press briefing.
($1 = 1.5328 Australian dollars)
(By Melanie Burton; Editing by Alison Williams)
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