The Fortescue Metals Group Limited (ASX: FMG) share price is rising today and it has announced a partnership with Plug Power Inc (NASDAQ: PLUG).
A segment of Fortescue, called Fortescue Future Industries (FFI), has been pushing ahead with its task of becoming a world leader in 100% renewable green energy. It has a focus on renewable green hydrogen and green ammonia with an initial plan to produce 15 million tonnes green hydrogen a year by 2030.
Fortescue and Plug Power partner up
Fortescue announced that its FFI segment and hydrogen fuel cell company Plug Power have entered a 50-50 joint venture to build a Gigafactory in Queensland.
The plan is to build a 2 gigawatt factory to produce large-scale proton exchange membrane (PEM) electrolysers. The factory will have the ability to expand into fuel cell systems and other hydrogen related infrastructure in the future.
Plug Power will supply the electrolyser and fuel cell technology, whilst FFI will contribute advanced manufacturing capabilities.
Both companies will fund the joint venture equally and will have an equal say on the joint venture’s board.
Fortescue said that FFI will be the main customer of the products, to be used as a key part in its plans to make Fortescue a 100% green along with its recently announced target for net zero Scope 3 emissions by 2040.
Green hydrogen manufacturing in Queensland
This follows news earlier this week that FFI is constructing the world’s largest electrolyser, renewable industry and equipment manufacturing centre at Gladstone in Queensland. The development is called the Global Green Energy Manufacturing centre (GEM).
Fortescue said that the first stage of the GEM is to establish Australia’s first multi-gigawatt-scale electrolyser factory. The factory will have an initial capacity of 2 gigawatts per annum, more than double current global production.
Presumably, this 50-50 joint venture with Plug Power is for the GEM. Although the announcement doesn’t explicitly state that.
CEO of Fortescue Future Industries Julie Shuttleworth said:
“Hydrogen fuel cells and electrolysers have a great future as the world reduces emissions. Green energy, green hydrogen, green ammonia and fuel cells powered by green hydrogen are all essential to support a planet with a high standard of living that will last forever.”
Summary thoughts on the Fortescue share price
This week has been a big one for Fortescue’s FFI segment. The progress seems to be accelerating and its exciting to see it unfold.
The Fortescue share price is largely tied to its iron ore operations. However I think that the moves being made by FFI do have an influence on the Fortescue share price, even if that influence is currently small. For shareholders who are looking at Fortescue long term for its FFI segment, including myself, it has been a promising week.
The Fortescue share price is up almost 2% at the time of writing. If it manages to stay low, or even drop, then I might be seeing that as a buying opportunity, as I am currently a shareholder and looking to buy more because I see long term potential with FFI.
