Key Takeaways
- The company has scrapped plans for a $US210 million Michigan Advanced Manufacturing Centre for EV batteries and chargers.
- Changes to US clean energy tax credits have created uncertainty around Fortescue’s manufacturing strategy in the US.
- Fortescue remains committed to its Real Zero target at its Pilbara mines and is exploring multiple decarbonisation pathways.
The real zero mission of iron ore billionaire Andrew Forrest has hit some bumpy ground, with news emerging that Fortescue has gone back to the drawing board on plans to build a zero emissions electric Infinity Train and abandoned a major green manufacturing project in the US.
News has emerged in the US that the Australian iron ore giant has dumped its plan to manufacture EV batteries, fast chargers and electrolysers – already in the early stages of development – in America’s former automotive heartland of Detroit, Michigan.
The reports, first reported in Crain’s Detroit Business, said Fortescue has pulled the plug on the $US210 million Michigan Advanced Manufacturing Centre – which has also disappeared from company’s website – in light of US President Donald Trump’s attack on clean energy tax credits.
This was confirmed to Renew Economy on Tuesday morning.
“Following a comprehensive review of the economics, logistics and deadlines to meet our ambitious decarbonisation targets, we have made the decision to reassess the future of our U.S. manufacturing strategy and no longer proceed with our planned Michigan Manufacturing Center,” a spokesperson said in an emailed statement.
“Current policy settings and market conditions in the United States, including recent changes to critical tax credits, have created significant uncertainty around the viability of long-term investment in advanced manufacturing.”
The Michigan plans had included $US20 million to buy two former Fisher car body plants, $US84 million for building renovations – believed to be in the very early stages – and $US106 million in new machinery and equipment.
As Renew Economy has reported, the plans had the backing of the Michigan state government, which last year awarded Fortescue a $US12.7 million ($A19.3 million) grant towards its rehabilitation of the car parts factories.
Fortescue had promised to create up to 600 jobs by 2030 – but would have needed to create 430 jobs by February 2031 in order to keep the grant.
“Detroit is an extremely attractive place to manufacture, given the skilled workforce, existing EV and green energy supply chains, and strong support from state and local governments,” said Fortescue WAE CEO Judith Judson in January, before leaving the company a few months later.
In the emailed statement on Tuesday, the Fortescue spokesperson said the company was “grateful for the strong support received from the Governor, Mayor and Detroit community,” its priority was to “do everything we can to remain focused on opportunities to meet our near-term global decarbonisation goals.”
Fortescue also said it would continue to explore opportunities to advance zero emission technologies in the United States – and its plan for a Colorado Technology Hub remains on the company website.
Closer to home, reports have emerged this week that Fortescue’s plans to develop an electric “Infinity Train” have gone back to the drawing board, after hitting an economic wall on the current design and development pathway.
The concept for the Infinity Train involves sending fully laden trains downhill from the mines to the port, charging the batteries with regenerative power along the way, and then sending the empty trains back up hill with battery power.
According to Boiling Cold, more than 100 staff and contractors supporting Fortescue’s battery electric locomotive (BEL) program were let go or moved to other parts of the company in June, after engineers concluded that the costs of the technology – as it stood – were too high.
Boiling Cold said the main problem was the ability of the battery electric locomotives to generate and store enough energy to take the empty trains back up to the mine site.
“Success now depends on Fortescue finding the right solution and then deploying it in the next five-and-a-half years,” author Peter Milne wrote. “Otherwise, it will continue to burn 80 million litres of diesel a year on its railways.”
In an emailed statement to Renew Economy on Tuesday, a company spokesperson said Fortescue remained fully committed to its Real Zero target at its Pilbara mines, having already identified solutions to “profitably eliminate” the majority of terrestrial Scope 1 and 2 emissions from its Australian operations.
“As with any ambitious decarbonisation effort, it is normal to encounter areas where new technologies are still being developed or tested. Any suggestion that we are off-track is simply incorrect,” the statement says.
“Decarbonising heavy haul rail is complex, particularly in a remote environment like the Pilbara. We are breaking new ground, and every challenge we face is an opportunity to learn and improve.
“As outlined in our Climate Transition Plan, we have not yet settled on a single rail decarbonisation solution – and that is by design. To date, we have progressed several pathways in parallel, including extensive work to assess and trial both battery and green ammonia options.
“Our prototype Battery Electric Locomotive was recently delivered to the Pilbara where it is being commissioned to be dispatched as part of our operating fleet, gathering valuable information to inform our ultimate rail decarbonisation solution,” the statement says.
“Importantly, our trials and studies to date have confirmed that zero-emissions rail is technically feasible – it is now a matter of delivering it in a way that maintains productivity and cost-efficiency.”
