The full article: source AFR
Forrest fears China iron ore call could turn Pilbara into ‘wasteland’
The billionaire businessman says China is about to make a huge call on the future of its steel industry, and there’s no guarantee it will include Australia.
May 21, 2025 – 12.00pm
Say what you like about Fortescue executive chairman Andrew Forrest, but he’s never been afraid of being provocative.
And it’s hard to think of a more provocative way to open a sold-out mining industry event, held in the country’s iron ore capital of Perth, than by declaring that the Pilbara could become “a wasteland”.
Forrest isn’t just trying to prod those in his industry and his home state into action, although that is part of it. And he isn’t just talking his own book – although that’s part of it, too. Rather, Forrest’s assessment is based on what he sees in China generally, and in its steel industry specifically.
Andrew Forrest says China is facing a big decision on iron ore. afr
While the West may have suddenly entered a “drill, baby, drill” world, Forrest told the Financial Review Mining Summit that China remains resolute in its desire to reduce emissions and, in his words, break its ties to petrochemical states and stop wasting money burning fossil fuels.
“There is not a snowflake’s chance in hell that they are not going to send their cities green with blue skies,” Forrest says. “They are determined as a people.”
A big part of that, he says, is a desire to “shut down the two-century old technology” that has long sat at the heart of the Chinese steel industry.
But Forrest says the shift away from traditional blast furnaces to electric arc furnaces is both a threat and a challenge for West Australia’s mighty iron ore industry, based in the Pilbara region. “They’re looking straight at a future which may or may not include Western Australia,” he says.
As China designs its new steel industry, it will make choices about the iron ore it needs. It may be, Forrest says, that it turns to high-grade ore that is specific to Brazil, Africa or other nations. Australia isn’t out of that race, but grades in the Pilbara – across BHP, Rio Tinto and Fortescue – have entered a stage of natural decline and Forrest says there are simply no guarantees that China will redesign its new steel industry with Australia in mind.
“That choice is getting made now, and so we don’t have any time to lose to have an iron ore industry which is going to deliver what the customer wants, which is green metal. They want that green metal, and they’re going to get it from us or somewhere else,” he told the summit.
This is where Forrest’s big warning for the nation intersects with Fortescue’s strategic direction. Having grown up as a traditional iron ore giant, Forrest wants Fortescue to move beyond this by producing green metals.
The first step would be green iron – this is where low-carbon solutions such as green hydrogen and solar energy are used to remove waste elements from iron ore, leaving behind a product that is almost pure iron – but Forrest’s boffins in Perth also continue to work on producing green steel.
Clearly, Fortescue is chasing that opportunity on its own. But Forrest also came to Wednesday’s event with a clear message for the re-elected governments of West Australian Premier Roger Cook – who he greeted at the summit with a warm bear-hug – and Prime Minister Anthony Albanese.
“I would just say to politicians who’ve been re-elected, please take your mandate. Give us lower-cost energy. Give us abundant energy,” he said.
Forrest has long railed at the subsidies given to the fossil fuel sector – $560 per Australian citizen, on his numbers – and is quick to say that Australia’s big miners shouldn’t need more handouts.
‘A wooden ear’
But at the very least, Forrest suggests that these subsidies should be re-purposed to invest in renewable energy and other technologies to reduce emissions, to at least give Australia a shot at making the leap to green metals that he believes China wants to see. “Don’t use it to buy more diesel. Don’t just use it to kill off technology. Don’t just use it to make sure the Pilbara becomes a wasteland because countries moved away from what we were supplying because we had a wooden ear to our customer.”
There will be plenty who will dismiss Forrest as alarmist, but the quality of his relationships in China, his understanding of the energy transition and his ground-up knowledge of iron ore means it cannot be ignored.
Boil it down, and Forrest’s message is an extension of the same thing that BHP chief executive Mike Henry has been telling us for the last few years: China is changing, the iron ore sector has plateaued and will gradually decline as the economic powerhouse it’s been for the past three decades.
Forrest is telling us that unless we listen to what China is telling us about what they want from their iron ore suppliers, that gradual decline could become something much uglier.
Rio Tinto’s iron ore chief, Simon Trott, is a little bit more relaxed about the ability for the Pilbara to navigate the challenge Forrest sets out. As he says, the demise of the Pilbara has been predicted several times in the past, but the region has always found a way to adapt.
But to be clear, Trott does not dismiss the direction or urgency of Forrest’s call to arms. Australian iron ore is not that well suited to electric arc furnaces, and the question of how to ensure demand for Rio’s famous Pilbara blend remains strong amid this shift has been high on Trott’s to-do list since he was appointed to his current role in 2021.
“Certainly, China is very focused on decarbonisation, and that’s evident in almost all discussions we have, whether that’s with [steel] mills, whether that’s with government officials or other industry stakeholders,” Trott says. “We’ve got to make sure out business is well positioned.”
But based on Rio’s R&D work, and the discussions with its customers, Trott is getting more confident we can keep Pilbara iron ore at the top of China’s shopping list for a long time to come.
“Yes, there’ll need to be some technology adaptions, but there’s a pathway for Pilbara ores to be well positioned.”
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