Aussie Hydrogen Leader Cutting Jobs, Moving Production Target
An Australian company at the forefront of the global push to utilize hydrogen has reduced its workforce and cut its production targets, citing high costs for power needed to produce the fuel.
Fortescue, a technology, energy and metal company headquartered in Perth, on July 17 said it would cut 700 jobs as part of a restructuring. The company also announced it was moving its goal to produce 15 million metric tons annually of green hydrogen, or hydrogen from renewable energy, beyond its original 2030 target.
Officials in a statement said the company needs to “continually evolve” in an effort to adhere to its business strategy while generating “maximum value for shareholders.”
Fortescue, long one of the world’s largest producers of iron ore, has become a global leader in the push for green hydrogen. Andrew Forrest, the company’s chair and founder, has said that despite challenges the group remains “resolute in its commitment to be the world’s leading green technology, energy and metals company with a laser focus on achieving Real Zero by 2030.”
Forrest told Perth radio station 6PR, “We’re not pulling back, this is something which I really genuinely believe in, I’m a hardcore bloke from the bush, I’m a miner, I’m a practical person, I’ve also had the good fortune to have an education in Australia, so I’ve really looked hard at the science. I just know that going the way we’re going with fossil fuels isn’t an option, the climate is changing dramatically around us.”
Forrest, whose nickname is Twiggy, said, “It’s been taken as ‘Twiggy is walking back from hydrogen’ … Twiggy is not walking back from hydrogen. The world has to have it. We just have to work out how to produce it cheaply enough.
“We need lower power prices, hydrogen is directly a function of the electricity cost—if the electricity cost is high, then we can’t make hydrogen cheaply enough to compete with fossil fuels,” Forrest said.
Arizona Facility
Forrest and Fortescue in May of this year celebrated the company’s first green hydrogen facility in the U.S. with a ceremony at the 158-acre Arizona Hydrogen site in Buckeye, Arizona. Fortescue has said the company is investing $550 million into U.S. production.
“The U.S. has made serious strides in attracting global investment in green hydrogen and decarbonization projects, like Fortescue’s solar and wind-powered Arizona Hydrogen facility. Fortescue is unashamedly a first-mover in this space, the world needs us to move quickly,” Forrest said during the event.
The company now is focused on the Arizona project, along with three other sites in Australia, Norway, and Brazil.
The Australian government has announced tax incentives for green hydrogen production, but Fortescue Energy CEO Mark Hutchinson told the H2 View news group that producing the fuel “really tough” because of high prices for electricity.
Fortescue in April of this year opened a 2-GW PEM (proton electrolyte membrane) electrolyser factory in Gladstone, Queensland, Australia. A second phase of the project, a 50-MW green hydrogen production facility, has received government approval.
Job Cuts
Forrest said job cuts would reduce duplication of roles across the business. He said the layoffs involved workers in departments such as human resources and government relations.
The chairman said the job cuts had left him “gutted like a fish with a blunt knife, mate.
“We’re up around 15,000 people … 5,000 contractors,” he said. We’ve let 700 people go. I just hate doing it.”
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).