Iron ore price, page-41447

Hydrogen reduction of iron ore has the potential to be an absolute game changer for the FMG iron ore business. FMG has the potential to be a first mover (a Tesla level first mover). The issue is that the technology works in a lab but nobody has yet been able to make it work commercially at scale and BHP tried producing direct reduced iron in their HBI plant about 20 years ago but it was such a disaster it threatened BHP's existence as a company. So this is highly risky but the rewards are enormous.
I think that is why Andrew Forrest is talking about hydrogen so much. I think he is focussing on the FMG core business exactly like you suggest. I think he sees the potential but he is smart he also understands the risks.

Hypothetically, if Andrew Forrest can achieve technically what he wants to achieve with hydrogen direct reduced iron then he becomes the only company able to supply China with what it says it wants. China has said it wants to use "scrap" to feed EAFs because this gives them a supply of steel with very little pollution. There is simply not enough scrap. So the only solution available is direct reduced iron. If FMG can make this work technically then FMG will be the first mover and hence have years head start on supplying China with the EAF feed they say they need. It is a seriously big deal with enormous potential returns for the FMG iron ore business.......provided it works. They know it works in a lab but they need to make it work at commercial scale.

To give you a feel for the economic advantages of what FMG is targetting here, at present the FMG ore sells for, say, USD70 or USD80 per tonne. Scrap is more in the range of USD500 or thereabouts. So for the same quantity of infrastructure FMG turbocharges its revenue if the technology works.