Fortescue has closed a 14.2 billion-yuan ($2 billion) loan from a syndicate of Chinese, Australian, and international banks — but none of the capital will fund its delayed hydrogen developments.
The financing, arranged amid tighter credit conditions and shifting commodity markets, is earmarked for “general corporate purposes” and to advance the company’s decarbonization plans, including technology partnerships in China. Notably absent from the spending plan is direct investment in the large-scale hydrogen projects Fortescue has been championing for years.
The omission underscores growing uncertainty around the miner’s clean energy ambitions. While Fortescue Future Industries (FFI) once targeted 15 million tones of green hydrogen production annually by 2030, several flagship projects — including those in Australia, South America, and Africa — have faced delays or downsizing. Industry analysts note that high capital expenditure requirements, coupled with persistent cost gaps between green hydrogen and conventional fuels, are slowing final investment decisions across the sector.
For Fortescue, whose iron ore business remains its primary revenue driver, allocating fresh debt to non-hydrogen activities signals a potential recalibration of priorities in the face of operational and market pressures.
The loan’s focus on Chinese partnerships highlights another dimension of Fortescue’s strategy: deepening integration with the supply chain of its largest iron ore customer while leveraging China’s manufacturing capacity for renewable energy components. Collaboration with “technology leaders” in the Chinese market could help reduce equipment costs for future hydrogen ventures, but without near-term project commitments, the benefits remain theoretical. The company’s challenge is balancing shareholder expectations for disciplined capital allocation with its high-profile decarbonization narrative.
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