I've been giving this massive potential Green Iron Ore project between China/Fortescue some more thought with points taken from what is publicly available.
Here are the points taken from various sources below.
* China need a source of green iron so that they can feed their steel mills.
* Fortescue now need to harvest the sun and the wind as a resource which is going to mean turning Fortescue's iron ores into a higher grade product.
* Fortescue need to invest in infrastructure, downstream processing facilities in order to turn their 55-60% iron ores into a 95% plus green metal that they can then export to China at scale.
* I don't think the market has fully grasped what's taking place with China or what this potentially means going forward.
* That almost US$1 trillion that they spent last year went into 350 gigawatts of solar and wind capacity in China.
* China see that being repeated over the next 20 years to meet their ambitious net zero targets which align perfectly with Fortescue's goals.
* Fortescue have highlighted that within the next 12 months they will have Australia's first green iron plant that will be commercially run producing more than 2000 tones per year of green iron, beneficiated in Western Australia with solar panels to make hydrogen and Fortescue's green iron ores exported to the world.
* As we know, Fortescue produces close to 200mt of iron ore in the Pilbara.
* Their goal NOW is to make green hydrogen at massive scale.
* AF highlighted...
* That will mean around 8mt per annum of green hydrogen using direct solar to hydrogen technology.
* It will be incredibly efficient because it can remove the oxygen which is 30% of iron ore.
* In other words, it'll be able to remove the oxygen from the 200mt per annum of iron ore with only 8mt per annum of green hydrogen.
* How incredibly cost efficient is that!
* This potentially large potential project will be in partnership with Chinese steel makers.
* It will be high quality green iron, which will be compatible with Chinese steel mills.
* This project is going to cost $100 billion plus!
* But keep in mind that it's costing China almost US$1 trillion dollars per year to get rid of their pollution.
* AF stresses that this is a very serious and positive investment for China, Australia and the world.
* In summary, it will potentially replace 200mt of iron ore imports with 100mt of green iron imports.
My thoughts are that I think it's not going to be as straight forward as we might think. How's this split going to look like? What stake are the parties going to have in this project? I honestly don't know. What are the royalties, again I'm unclear how to answer that. Who are the specific offtakers? Do they have them potentially lined up? What does the green finished product look like? Or as you highlighted Jb...
iron ore --> iron --> steel
so the Chinese take our green pig iron and turn it into steel.... Saving 90+% of emissions
All I know is that should the potential China / Fortescue partnership materialise it will be a very BIG project, it will require this kind of collaboration, especially the kind of relationship that China / Fortescue have formed and nurtured for over two decades, which will only succeed if all parties are on the same page, all resources from both parties are set in place, the financing/investors etc all ticked off...then and only then can something this massive truly materialise.
(20min delay)
