Fortescue delivers iron ore record but will book $227m impairment after ditching two green hydrogen projects

Iron ore is flowing from Fortescue’s Pilbara mines at record rates but the green energy side of the global business continues its rout in part due to Donald Trump. Investors were pleased with Fortescue’s strong mining performance and decision to kill green hydrogen projects in Australia and the United States. Shares in Andrew Forrest’s flagship company jumped 4 per cent to $18.96 in early trade. Fortescue shipped 55.2 million tonnes of iron ore in the June quarter to end the 2025 financial year having exported 198.4mt. The results, predicted by The West Australian, were both a quarterly and annual record for Fortescue. Costs to produce the steel-making ingredient fell for the first time in five years and could be trimmed further in the months ahead. Fortescue has pencilled in between 195mt and 205mt of shipments this financial year, including 10mt to 12mt from its troubled Iron Bridge project. Iron Bridge was supposed to be producing 22mt of iron ore concentrate annually two years ago, but Fortescue in May conceded that target would not be achieved until at least 2028. Fortescue is spending $US50m ($75m) on a pilot plant at its Christmas Creek mine to turn iron ore into steel using ‘green hydrogen’. Green hydrogen is produced by the electrolysis of water via renewable energy sources. Dino Otranto, the chief executive of Fortescue’s money-spinning metals division, said Christmas Creek is “largely on track” to start churning out steel by the end of this year. “We had an extreme stretch target to finish that project by the end of this calendar year, and it’s largely still on track for that,” he told analysts and investors on Thursday. “We’re well into the construction now of the actual steel plant, the hydrogen facilities and all that are already built, so we’re looking forward to commissioning the plant soon.” But the company’s global ambitions to commercialise green hydrogen have taken another major blow with its two most advanced projects now consigned to the scrapheap. “Following a detailed review, Fortescue has determined that the Arizona hydrogen project in the United States and PEM50 Project in Gladstone, Australia will not proceed,” it stated on Thursday. “An assessment is under way to re-purpose the assets and the land.” Fortescue expects to book a $US150m ($227m) write-down after binning the two projects. The West in May revealed the $US150m Gladstone electrolyser manufacturing plant in Queensland was in serious doubt after 90 workers were laid off across the site and Fortescue’s Perth headquarters. Mark Hutchinson quit as Fortescue’s green energy boss less than two weeks later. These job cuts were the latest leg of a huge cull across the company’s sprawling green hydrogen team that started in July last year. Fortescue in February said the re-election of Donald Trump jeopardised its $US550 million green hydrogen project in the western US state of Arizona. It was earmarked for generous grants under the Biden administration but President Trump’s team appear to have poured cold water on those taxpayer funding hopes. “A shift in policy priorities away from green energy has changed the situation in the US. 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’s freshly-appointed energy boss Gus Pichot said on Thursday. The two green hydrogen projects being cancelled showed Fortescue was “frugal” with shareholder money, according to Mr Pichot, but said the company was not giving up on the clean fuel yet. “While the world has changed significantly, we have not . . . we must remain nimble and frugal with the resources our shareholders have entrusted with us,” he said. “I want to make it clear we are not giving up green energy, and green hydrogen is key to our future, including our green metal strategy.”