Why is Fortescue (ASX:FMG) in news these days?

2 min read | September 28, 2022 11:15 AM AEST | By Ritwika

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Highlights:

Fortescue recently shared an update on its decarbonisation strategy that aims to avoid the usage of fossil fuels.

As a result, this strategy will bring terrestrial emissions down to zero at Fortescue’s iron ore operations by 2030.

Fortescue shares were trading 0.535% lower at 10:21 AM AEST on ASX.

Vertically integrated green energy and resource company Fortescue Metals Group Ltd (ASX:FMG) shares opened trading marginally lower on ASX on Wednesday. Fortescue was spotted trading 0.535% lower at AU$16.730 per share at 10:21 AM AEST today (28 September 2022).

Over the last 12 months, the share price of Fortescue has marked a gain of over 13% on ASX. Shares on a 0 basis, have fallen 15.26% on ASX (as of 10:21 AM AEST today).

What has been going on within Fortescue recently?

On 20 September 2022, Fortescue announced that it has updated its decarbonisation strategy. The new strategy will aim to avoid the usage of fossil fuels and is expected to achieve real zero terrestrial emissions within the company’s iron ore operations by 2030. As a result, this strategy will not only produce carbon-free products for Fortescue’s customers but is also environment-friendly in nature.

Fortescue has also shared that the new strategy will make the company lead the industry with respect to increasing customer community and investor expectations to bring down or eliminate carbon emissions.

Furthermore, the company is also expecting to generate lucrative economic returns from its investment in this new strategy that aims to avoid the usage of fossil fuels. It is so because this strategy brings down operating costs due to the elimination of diesel, natural gas and carbon offset purchases from its supply chain.

The new decarbonisation strategy of Fortescue and the proposed investment will provide the following environmental and economic returns by 2030:

The estimated value of the investment toward Fortescue’s new decarbonisation strategy is US$6.2 billion, and it is primarily planned for FY24-28. The company said that it is currently in a good position to fund its investment in the new strategy.

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