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Western Australian iron ore giant Fortescue (ASX: FMG) is accelerating delivery of what it describes as the world's first replicable large-scale industrial green energy grid in the Pilbara, with the company expecting to save US$100 million ($155 million) in fossil fuel costs by next year as it eliminates diesel from its mining operations.
The company plans to have 290MW of installed renewable capacity operational by early next year, enabling daytime "green processing" across its iron ore operations.
Full 24-hour fossil-fuel-free operation is targeted later that year, well ahead of Fortescue's previously announced December 2030 Real Zero target.
The complete Pilbara green grid will comprise 1.2GW of solar, more than 600MW of wind and 4–5GWh of battery storage, with full completion targeted by the end of 2028.
Fortescue says the infrastructure has a pathway to expand by a further 2GW for less than US$2.5 billion ($3.9 billion).
Beyond the near-term US$100 million fuel cost saving, the miner says the decarbonisation program will deliver a C1 unit cost reduction of at least US$2 to US$4 per wet metric tonne at completion - a significant structural shift for a company that shipped a record 100.2 million tonnes in the first half of FY26 alone.
Fortescue says the deployment is being delivered within its approved decarbonisation budget.
The company's original 2022 execution plan outlined a US$6.2 billion ($9.6 billion) capital investment to eliminate fossil fuels from its Pilbara operations, projecting net operating cost savings of US$818 million per year from 2030 at then-prevailing fuel prices.
Fortescue founder and executive chairman Andrew Forrest last year declared the company’s push to electrify its Pilbara operations and deliver on its target of Real Zero by 2030 would also “catalyse decarbonisation globally”.
“Fortescue is building global alliances – linking the Pilbara’s world-leading operational expertise, America’s and Australia’s research and development strength, the UK’s and Europe’s innovation and engineering excellence and anchoring it all with scale and cost-efficient manufacturing capability in China and the US,” Forrest told the United Nations General Assembly during Climate Week NYC in September.
“Together, this creates a powerful multilateral network of commercial cooperation to accelerate decarbonisation and defeat mankind's greatest threat – global warming.”
The green grid ramp-up comes on the back of a strong first half for Fortescue, which in February reported revenue of US$8.4 billion ($13 billion) for the first half of FY26 – up 10 per cent from a year earlier.
Underlying EBITDA of US$4.5 billion ($7 billion) was up 23 per cent as margins rose 23 per cent to 53 per cent during the period.
Hematite C1 costs came in at US$18.64 per wet metric tonne in the half, underscoring the materiality of the projected US$2 to US$4 per tonne reduction once the full green grid is operational.
Fortescue spent US$426 million ($661 million) on decarbonisation capital expenditure in the first half of FY26 as construction activity accelerated across the Pilbara.
The scale of the Pilbara project, which will combine solar, wind and battery storage to power ore processing, rail haulage and port operations around the clock, positions Fortescue as a test case for whether heavy industry can fully decarbonise at a cost advantage rather than a cost penalty.
Fortescue says the renewable infrastructure is designed to be replicable, with the potential to serve as a template for decarbonisation across resource operations globally.
The company targets full completion of the grid by the end of 2028, with 24-hour fossil-fuel-free operation expected to begin next year.
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