Fortescue Inks $2.8B Deal to Buy Zero Emission Machines From Liebherr

Fortescue Ltd FSUGY has strengthened its partnership with Liebherr, increasing the mining equipment to be supplied by the latter from 120 haul trucks to 475 zero-emission machines. This will create one of the world's largest zero-emission mining fleet, advancing Fortescue’s progress toward transitioning its diesel-powered mining fleet to a zero-emission fleet.

This is Fortescue’s single largest contract in its history and marks an important step toward realizing its target to achieve Real Zero Scope 1 and 2 emissions across its iron ore operations by 2030.

Fortescue’s Efforts to Achieve its 2030 "Real Zero" Goal

Fortescue joined forces with Germany-based equipment manufacturer Liebherr in June 2022 for the development and supply of 120 green mining haul trucks. These were to be integrated with the zero-emission power system technologies in development. 

Expanding on the partnership, Fortescue will now buy 475 zero-emission machines that consist of 360 autonomous battery electric trucks, 55 electric excavators and 60 battery-powered dozers. 

The equipment will be powered by the battery power system developed by Fortescue Zero. Liebherr and Fortescue will also deploy an autonomous battery electric haulage solution for large-scale mining operations. Fortescue Zero developed this battery technology and jointly developed the Automated Haulage Solution (AHS), thereby paving the way to provide green innovative solutions to eliminate emissions from heavy industry. 

The AHS includes an Energy Management System that coordinates the static recharge assignments for the trucks and ensures the charger is fully utilized without causing queuing on site.

Fortescue Sets Emission Targets Ahead of Competitors

Fortescue has set a timeline to achieve real zero emissions from its Australian iron ore operations by 2030. It expects Net zero Scope 3 emissions by 2040, a decade earlier than its peers. Scope 3 emissions are those emissions that fall within a company’s value chain but are outside its operational control.  

BHP Group BHP targets to reduce operational greenhouse gas emissions by at least 30% by fiscal 2030 from the fiscal 2020 baseline. It expects to attain net zero operational greenhouse gas emissions by 2050. 

Rio Tinto RIO is aiming to reduce Scope 1 and 2 emissions by 15% by 2025 and 50% by 2030 from the 2018 level. RIO also expects to reach net zero by 2050.

VALE S.A. VALE is working to reduce Scope 1 and 2 emissions by 33% by 2030 from the baseline year of 2017. Vale targets to achieve net-zero Scope 1 and 2 emissions by 2050.

Fortescue's Expanded Zero-Emission Fleet

The 475 emission-free machines that will be supplied represent about two-thirds of the current mining fleet at Fortescue’s operations.

Liebherr will supply approximately 360 of its T 264 trucks, building on the previously agreed upon 120 T 264 trucks under the initial partnership with Fortescue. The first trucks were delivered to FSUGY’s Western Australian operations in October 2023. A portion of the initial trucks will be converted to zero-emission power trains by 2030. The battery electric T 264 will commence onsite validation at the end of 2025. 

The partnership also includes the supply of 55 R 9400 E electric excavators. This fleet will be a mix of backhoe and face shovel configurations. Fortescue first adopted Liebherr’s electric excavator technology in 2023, with the commissioning of Australia’s first operational electric excavator in December 2023. Three R 9400 E excavators are already operational across its sites.

Fortescue’s battery power system will be integrated into an electric version of Liebherr’s flagship mining dozer, the PR 776, which is currently in development. Once developed, Liebherr will supply FSUGY with 60 dozers. 
By investing in large-scale, zero-emission mining fleet, innovative battery and automation technologies, Fortescue is leading the transition  from fossil fuels and to a greener, more sustainable mining industry. 

Carbon emissions from the combustion of diesel account for a major part of Scope 1 and 2 emissions in the mining sector. Miners are thus focused on initiatives to replace diesel from their operations.

Price Performance of FSUGY Stock & Zacks Rank

In the past year, shares of Fortescue have lost 1.6% compared with the industry’s 2.6% decline.

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FSUGY currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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