Fortescue Resets Hydrogen Strategy Amid Record-Breaking Iron Ore Performance

Fortescue Scales Back Hydrogen Projects, Posts Record 198.4M Tonnes Iron Ore Shipments in FY2025

Fortescue has significantly scaled back its global green hydrogen ambitions, shelving its Arizona hydrogen initiative and the PEM50 electrolyser project as part of a strategic reset.

Meanwhile, its core iron ore operations have posted record-breaking results for the 2025 financial year.

The Australian miner, led by founder Andrew Forrest who had long championed hydrogen as a future growth avenue, is now taking a more measured approach.

The company said its energy project pipeline is being “refined in a disciplined manner” to focus on commercial viability and long-term returns.

“Over the past year, we have refined and reconsidered our global project pipeline with a sharper focus on commercial outcomes,” said Gus Pichot, Fortescue’s newly appointed CEO of Growth and Energy, on Thursday. “That’s meant making some tough decisions.”

“Being first is not always easy. To succeed, we must stay nimble and frugal with the resources our shareholders have entrusted to us. Let me be clear—we’re not giving up,” he said during a conference call.

Pichot reaffirmed the company’s belief in the future of green energy and green hydrogen, noting that technology is advancing rapidly, which will eventually bring down costs and expand the market. “But we must remain realistic and disciplined.”

Fortescue is now assessing how to repurpose the shelved projects’ assets and land. It expects to record a pre-tax write-down of $150 million related to the PEM50 electrolyser manufacturing equipment in Gladstone and engineering costs for the Arizona project.

Explaining the strategic pivot, Pichot cited a shift in U.S. policy priorities away from green energy. “The lack of certainty and a retreat in ambition have halted momentum in emerging green energy markets, making it difficult for previously viable projects to go forward.”

At the PEM50 site, Fortescue is moving away from electrolyser development to focus on newer technologies that could enable low-cost hydrogen production for green industries in Australia.

“This is vital for progressing our green iron ambitions, though it means the PEM50 project is no longer required,” he added.

This strategic recalibration marks a turning point for Fortescue, previously viewed as one of the most aggressive players in the green hydrogen space.

CEO of Metals and Operations Dino Otranto emphasized that Fortescue’s core mining business continues to thrive. “Our performance this year has been exceptional.

We achieved record quarterly shipments of 55.2 million tonnes, contributing to a full-year record of 198.4 million tonnes,” Otranto said.

“We met all aspects of our market guidance and maintained our position as the industry’s lowest-cost producer, with annual C1 costs declining for the first time since FY2020.”

In FY2025, iron ore shipments rose 4% year-over-year, including 7.1 million tonnes from the ramp-up of the Iron Bridge project.

Hematite C1 costs dropped to $17.99 per wet metric tonne (wmt) for the year, with fourth-quarter costs falling further to $16.29/wmt.

Iron Bridge alone shipped 2.4 million tonnes in Q4, earning $108 per dry metric tonne—fully capturing the Platts 65% index and outperforming the 62% benchmark.

Fortescue closed the year with $4.3 billion in cash and net debt of $1.1 billion, after spending $3.9 billion in capital expenditures.

Looking ahead to FY2026, the company has set shipment guidance at 195–205 million tonnes, including 10–12 million tonnes from Iron Bridge. C1 cost forecasts are in the range of $17.50–$18.50/wmt.

Entering the new financial year, Otranto said Fortescue is focused on safely ramping up Iron Bridge, pursuing further production records, and accelerating its decarbonisation agenda—especially in green iron development.

“After returning from China last week, it’s clear there is strong bilateral support to collaborate on a green iron and steel supply chain. This partnership could drive investment, strengthen trade ties, and cut emissions at scale.”