Fortescue’s Forrest doesn’t get the hype over critical minerals

[Ben Graham]

Fortescue (ASX: FMG) founder and executive chairman Andrew Forrest said on Friday that the company was progressing critical minerals projects despite not understanding the “fuss” surrounding the strategic metals.

Speaking at Fortescue’s annual general meeting in Perth, Forrest said the company remained committed to its critical minerals projects but questioned the hype following a deal signed by US President Donald Trump and Australian Prime Minister Anthony Albanese on October 20.

“It was good. Knock yourselves out. I mean, I don’t see anything that rare about critical minerals,” Forrest told reporters following the meeting. “You’ve got declining strategic commodity prices everywhere. I don’t see the fuss, but anyway, other people do so it’s good for the business. We’ve got plenty of critical minerals, which we’re happy to get out of the ground.”

Despite downplaying the sector, Forrest admitted Fortescue was exploring for rare earths in Brazil, where CEO of growth and energy Gus Pichot had discovered “buckets” of material.

“There’s nothing rare about rare earths. [Pichot’s] got a small ocean of it,” he said. “I’d like to see it developed and cranking across to Louisiana and getting developed.”

His comments coincided with Fortescue’s wholly owned subsidiary Wyloo Metals and joint venture partner Hastings Technology Metals (ASX: HAS) signing a non-binding agreement with Ucore Rare Metals (TSXV: UCU). They will explore a long-term offtake agreement for concentrate from the Yangibana project in Western Australia and hydrometallurgical processing options in Louisiana.

Failure key

Forrest reaffirmed Fortescue’s commitment to achieving real zero emissions by 2030, defending the company’s investment in decarbonization. “This $6.2 billion investment we took back in 2022 will pay dividends. I give you my assurance and sure, we’re the guys up front with the arrows in the back, to be dragged down and told we failed here, we failed there,” Forrest told the meeting. 

“Honestly, it just put steel into the spine of the 20,000 people who work at Fortescue getting constantly criticized. Decarbonization is not a straight line. It demands creativity, experimentation and relentless innovation. We’ve literally had to invent our way through.”

Fortescue has walked away from some of its green hydrogen projects amid weak economics, but Forrest said trying and failing was the “fast track to success”.

“We specialized into hydrogen, believing it would get really big – it hasn’t yet,” Forrest said. “What is enormous is replacing fossil fuel-generated energy with renewables, firmed by the breakthrough we’ve all seen in batteries. That is a crossover point in history, and that’s beginning to happen.”

Forrest conceded there had been job losses in its green energy division but said Fortescue was creating jobs elsewhere.

“I don’t know the net number, but we’re swinging harder and harder into R&D. That is where the value is,” he said. 

“We’ve got smartest people in the world working for us. Other people can do spectacular manufacturing. We did what we said we’d do. We’d see if we could compete on manufacturing. We couldn’t, but we can definitely compete on R&D.”

Trump, oilers criticized

Forrest also took aim at big oil companies and Trump, accusing them of dividing the world on climate change.

“You’ve got a President of the United States who declared that climate change is the greatest con job in history, straight in the face of massive investment by some of the smartest people I will ever meet,” he said.

“We’ve got these two stories unfolding, one of progress, one of retraction. One side is racing to deploy renewables at record speed. The other is changing to a view of a romanticized past that never even existed as their own economics fall away.”

His comments followed rival Hancock Prospecting’s annual results on Thursday, when CEO Garry Korte warned that Australia could not afford the cost of reaching net zero.

Forrest dismissed the claim. “All I can say is that we’re seeing economic growth. We’re seeing investment … so trying to pedal yourself back to a utopian history which never existed anyway is not a way to grow an economy,” he said.