Fortescue Metals Group (FMG) and its green hydrogen ambitions are under severe scrutiny as the company faces a fierce legal dispute with rival, Element Zero. This battle could significantly impact FMG’s future investment viability.
Fortescue has brought allegations against Element Zero, a competitor founded by former FMG employees, for purportedly stealing proprietary technology. Among the defendants are Element Zero CEO Michael Masterman and scientists Bart Kolodziejczyk and Bjorn Winther-Jensen. According to Fortescue, without their technological secrets, Element Zero could not have developed a functional green-iron prototype.
The mining giant itself isn’t without blame; it faces accusations of aggressive spying on these former employees, putting its ethical practices into question. Recently, Fortescue’s share price fell by 16.8% as the company shed 700 workers and faced setbacks in iron ore production. Despite this, baby boomers continue to invest heavily in FMG, trusting in its long-term potential.
Green iron, or using hydrogen instead of coal to refine iron ore, presents a revolutionary low-carbon process. While promising, the technology has been in development since 2004 without commercial success. Fortescue has invested significantly in this technology and accused Element Zero of hampering their plans by misappropriating intellectual property.
In an aggressive move, Fortescue used secret court orders to raid the homes of former employees and the offices of Element Zero, seizing around three terabytes of data. Although much of it was claimed to be unrelated to the case, the stolen data was crucial for Fortescue’s claims. However, this extreme level of surveillance raised ethical concerns, including stalking behaviors and spying on properties not listed in the search orders.
Uncertainty Over Green Hydrogen
Green hydrogen technology, despite its green credentials, faces significant economic and technological hurdles. Energy efficiency and infrastructure costs make hydrogen a less viable competitor compared to battery technology. Hydrogen fuel cells only achieve about 25-30% efficiency compared to batteries, which use about 70% of the original energy from the source. Additionally, substantial investment would be required to upgrade existing gas pipelines for hydrogen use.
FMG, led by Andrew Forrest, has not completely abandoned its hydrogen ambitions but has delayed its green hydrogen plans in the NSW Upper Hunter area, leading to job losses and industry concerns. This delay is due to high power costs, which make hydrogen production uneconomical when compared to fossil fuels.
While Fortescue focuses on hydrogen and green steel, advancements in battery technologies and alternative storage systems like thermal batteries may present more competitive and economically feasible solutions. Mining giants Rio Tinto and BHP are also exploring electric smelters that rely on renewable energy, signaling a potential shift away from hydrogen.
