The Fortescue Metals Group Limited (ASX: FMG) share price is up after it announced a green hydrogen development in QLD through its FFI segment.
Fortescue Future Industries (FFI) is the segment of Fortescue that is working on 100% renewable energy for Fortescue and the wider industry. FFI’s goal is to become the world’s leading, fully renewable energy and green products company.
New FFI factory in Queensland
Fortescue announced that FFI is constructing the world’s largest electrolyser, renewable industry and equipment manufacturing centre at Gladstone in Queensland.
The new development is called the Global Green Energy Manufacturing centre (GEM) and FFI is planning for this to be the first in a series of centres across regional Australia.
Fortescue said that the GEM will be a key part of achieving its target of carbon neutrality by 2030.
The GEM will enable Queensland and Australia to become a manufacturing centre for green industry infrastructure for both domestic use and export.
Fortescue said that the investment could be up to US$650 million, subject to customer demand for orders of electrolysers and associated green energy. The initial electrolyser investment is expected to be US$83 million.
Big tick from the Queensland Government
The project is expected to create over 300 jobs in the medium term, with thousands more jobs in the years to come.
Qld Premier Annastacia Palaszczuk said: “We don’t just want to export our resources – we want to develop a manufacturing industry capable of making the electrolysers in Queensland as well.
“Andrew Forrest and I both see Queensland’s great potential as a renewables exporter and manufacturer of hydrogen equipment… We have a strategy to partner with the private sector to make Queensland a world leader in advanced manufacturing and hydrogen generation.”
What will the GEM do?
It will produce specialist production lines to the requirements of FFI and its customers. Manufacturing will include wind turbines, solar photovoltaic cells, electrolysers, long range electric cabling, electrification systems and associated infrastructure.
Fortescue said that stage one of the six-stage project will establish Australia’s first multi-gigawatt-scale electrolyser factory. This factory will have an initial capacity of 2 gigawatts per annum, which is more than double current production globally.
The company also intends to set up its first Vocational Training and Employment centre (VTEC) in Queensland at the GEM.
With final approvals still in the works, Fortescue said that construction of the GEM is expected to start in February 2022. The first electrolysers are scheduled off the production line in early 2023.
Final thoughts on the Fortescue share price
FFI has really been making moves lately. Just a few days ago it bought a 60% stake in a Dutch energy tech company.
It’s really good to see how seriously Fortescue and FFI are taking the goal of renewable green energy. There is still a long way to go, but it is refreshing to see how fast it is progressing.
At the time of writing the Fortescue share price is up around 1.7%. Although FFI is an impressive part of Fortescue’s business, it is still a small segment. The Fortescue share price is still largely intertwined with the iron ore price.
I am impressed with what FFI is doing and how it is doing it. I’m not usually a fan of mining stocks, however Fortescue is in my portfolio and on my watch list as a long term idea. I’m excited to see where the business goes from here.
