Amid record iron ore shipments and tightening capital discipline, Fortescue has taken a sharp pivot, announcing the cancellation of two flagship green hydrogen projects in the United States and Australia.
In its latest quarterly update, the Perth-based miner confirmed it would abandon both the Arizona Hydrogen Project and the PEM50 electrolyzer facility in Gladstone following an internal review. Fortescue now expects a pre-tax writedown of approximately $150 million in its second-half results—linked to sunk costs from these hydrogen ventures, including site development and electrolyzer manufacturing equipment.
This retreat from early-stage hydrogen deployment marks a notable reversal for Fortescue, whose founder Andrew Forrest has been one of the loudest corporate voices championing green hydrogen as a critical solution for industrial decarbonization. The company is now evaluating ways to repurpose assets linked to the shelved projects—suggesting at least some infrastructure might be salvaged or redirected.
The decision comes in the context of record operational performance in Fortescue’s core business. The company shipped 55.2 million tones of iron ore in the fourth quarter—beating analyst expectations and topping the 53.7 million tones recorded in the same period last year. That brought full-year shipments to 198.4 million tones, hitting the upper end of its guidance range of 190–200 million tones.
With Iron Bridge, its sole magnetite operation in the Pilbara, contributing 10–12 million tones on a 100% basis, Fortescue’s FY2026 guidance sits at 195–205 million tones—another step up as it continues to expand premium product output.
But even as output scales, so does capital expenditure. Fortescue now expects FY2026 metals capex to land between $3.3 billion and $4 billion, reflecting inflationary pressures, project complexity, and continued investment in its transition minerals strategy. By comparison, Rio Tinto and BHP—its larger rivals—have similarly leaned into cost discipline while reporting strong output: BHP posted record copper production in FY2025, while Rio Tinto marked its best Q2 iron ore volumes since 2018.
Fortescue’s hydrogen retrenchment raises questions about the commercial viability of large-scale green hydrogen infrastructure absent government underwriting or clear offtake commitments. It also signals a narrowing focus as the company doubles down on its core mining operations in an increasingly volatile global commodities market.
Stay updated on the latest in energy! Follow us on LinkedIn, Facebook, and X for real-time news and insights. Don’t miss out on exclusive interviews and webinars—subscribe to our YouTube channel today! Join our community and be part of the conversation shaping the future of energy.
