The Fortescue Metals Group (ASX: FMG) share price is up after its Fortescue Future Industries (FFI) segment announced progress has been made in the joint project with Incitec Pivot (ASX: IPL).
Fortescue is fast becoming known for the moves it’s been making with green hydrogen through its FFI segment. The market has started to pay attention, with the Fortescue share price rising over 19% in the past month.
FFI and Incitec Pivot
In October 2021 FFI announced that it had partnered with Australia’s largest fertilizer provider Incitec Pivot. The joint project intends to convert Incitec Pivot’s ammonia-production facility at Gibson Island in Brisbane to run on renewable hydrogen instead of fossil fuel gas.
FFI said that it plans to construct an on-site electrolysis plant, which could produce up to 50,000 tonnes of green hydrogen per year for conversion into green ammonia. This would replace the current fossil fuel gas feedstock.
The first step of the project was a feasibility study. FFI announced today that the project has been found to be “technically feasible” and issued Incitec Pivot with a notice to proceed to the next phase.
The next stage in the joint partnership
FFI said that it will negotiate with Incitec Pivot to form an agreement and start the front end engineering design study. The study will clarify cost, schedule, permitting and commercial agreements and potential final investment decision.
Management said that the opportunity to harness existing infrastructure at Gibson Island fast tracks the production of green hydrogen at an industrial scale. FFI Chief Executive Officer Julie Shuttleworth said that this project could be Australia’s first green ammonia production facility.
FFI Founder and Chairman Dr Andrew Forrest said: “The announcement of this important agreement at the Incitec Pivot site in Brisbane in October was a significant milestone and I am delighted that we are now ready to confirm that we are moving to the next phase of studies to make this dream a reality.”
Incitec Pivot management said that it is committed to pursuing opportunities to help create a more sustainable world and that the investigation technologies, such as green ammonia, is a key part of that.
Final thoughts
I’ve been following Fortescue’s FFI progress closely and it is good to see that this project with Incitec Pivot is progressing.
This project however is just one of the many things FFI have been up to lately. It is positioning itself to be a strong player in green hydrogen.
The Incitec Pivot share price is up over 2% at the time of writing. Although that share price movement could be attributed to the adblue supply issues, rising prices could benefit Incitec Pivot.
The Fortescue share price is up almost 2% today. Over the past month the share price has risen by over 19%. When compared to the other two large iron ore miners on the ASX, BHP Group Ltd (ASX: BHP) has risen by 11.8% and Rio Tinto Limited (ASX: RIO) has risen by 9.7%. It seems that the market has decided that Fortescue is compelling beyond being an iron ore miner and I agree.
