Fortescue Iron Ore Shipments Rise; Cancels Green Hydrogen Projects — Update

By Rhiannon Hoyle

Fortescue reported record annual iron-ore shipments but said it has canceled green hydrogen projects in the U.S. and Australia as the Trump administration cuts support for clean-energy industries.

The Australian miner said it shipped 198.4 million metric tons of steel ingredient iron ore in the 12 months through June, up 4% on the year prior. Production expenses declined by 1%, Fortescue's first annual reduction in costs since fiscal 2020.

Shares were 4.4% higher by early afternoon in Sydney, trading at a five-month high.

Fortescue is the world's fourth-biggest producer of iron ore, which it digs up in a remote part of northwest Australia to ship to steel mills, mostly in China.

In recent years, the company has used a chunk of earnings from those operations to try to build a global green hydrogen business, but it has faced challenges in working out how to produce the commodity cheaply enough.

On Thursday, Fortescue said it won't proceed with a project designed to produce green hydrogen--hydrogen made with renewable energy--at a site in Arizona by mid-2026.

"A shift in policy priorities away from green energy has changed the situation in the U.S.," Gus Pichot, Fortescue's chief executive of growth and energy, told analysts on a call. "The lack of certainty and a step back in green ambition has stopped the emerging green-energy markets, making it hard for previously feasible projects to proceed."

Fortescue also abandoned a green hydrogen project in Gladstone, Australia.

The company flagged earlier this year that it was reconsidering the development timeframes for those projects amid uncertain market conditions.

Last week, Executive Chairman Andrew Forrest told The Wall Street Journal that Fortescue was looking to buy established green-energy operations in the U.S. but would hold back on projects under development in light of President Trump's policies.

The big tax-and-spending bill Trump signed on July 4 is set to end Biden-era subsidies for clean-energy companies this year.

Fortescue is assessing how it might repurpose the assets and expects to record a write-down of roughly $150 million in its second-half fiscal results.

"I want to make it clear we're not giving up," said Pichot. "Technology is improving at rapid speed, the cost will come down and the market will come. But we must also be realistic and disciplined."

Fortescue, which has a market value of around $37 billion, must ensure it delivers value for shareholders, he said.

The company expects to spend roughly $700 million on its energy business in fiscal 2026, down from around $1.1 billion last year.

Analysts cheered the reduced energy spending, as well as the strong performance of Fortescue's iron-ore mining operations. "The standout performance for us was in cost control," Jarden analysts said in a client note.

Dino Otranto, Fortescue's chief executive of metals and operations, said the miner's iron-ore operations benefited from continuing investments and a focus on productivity and efficiency.

"As we look ahead, we're focused on building on this momentum of record shipment volumes, industry leading unit cost performance and accelerating decarbonization," Otranto said on the analyst call.

Fortescue expects to ship between 195 million tons and 205 million tons of iron ore over the coming year, and costs to be largely flat.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

July 24, 2025 00:45 ET (04:45 GMT)