Fortescue Metals Group will unveil a potential aviation fuel supply deal within days, as chair Andrew Forrest defended his ambitious green hydrogen plans at the company’s annual meeting on Tuesday.
The Fortescue investor presentation said about 10 per cent of net profit after tax would be directed to its Fortescue Future Industries business, with the company posting a $US10 billion profit for the 2021 financial year.
That means more than $1 billion would be dedicated to the Fortescue green energy arm.
Dr Forrest, who attended virtually, said $US130 trillion worth of investments into renewable and green energy initiatives had emerged from the 2021 UN Climate Change Conference COP26, which he attended .
He reassured investors that potential offtake partners expressed keen interest on the back of FMG’s recent agreement with construction giant J C Bamford Excavators, a move Mr Forrest said “broke the damn of green hydrogen skepticism.”
The deal struck between Fortescue Future Industries, JCB and Ryze Hydrogen would see FFI supply green hydrogen to the UK market, which would then be distributed by UK counterparts.
He also flagged a memorandum of understanding for a potential global aviation supply agreement which he said would be announced in the coming days.
Looking to next year, Dr Forrest said there would be further offtake agreements for renewables ventures and more green technologies to come.
These are tipped to include finalised methods to make “green iron from green ore” and the generation of first green hydrogen molecules by early next year.
Chief executive Elizabeth Gaines spoke about FMG’s sustainability financing framework, launched on Tuesday.
It includes a plan to align funding policies with the company’s broader sustainability and climate change objectives.
Speaking to investors the Hyatt Hotel in Perth today, Ms Gaines recapped what had been a mostly solid financial year for Fortescue with 182.2 million tonnes of iron ore shipped and a $13.8 billion net after tax profit.
Production is expected to remain the same for FY22 however C1 costs are set to increase from $US13.93 ($A18.77) to around $US15 ($A20.21).
“Fortescue has never been in better shape,” Ms Gaines said to shareholders.
The framework includes the future issue of “green and social debt instruments” which FMG says will support investments in eligible green and social projects.
“The introduction of our sustainability financing framework is a demonstration of our team’s passion and commitment to integrate sustainability into all aspects of our business,” Ms Gaines said in a statement.
Speaking further on the topic at the AGM, Ms Gaines iterated that companies with better ESG credentials would have better access to capital, warning that those without those credentials risk being left behind.
