The Fortescue Metals Group Limited (ASX: FMG) share price is up 2% in early trading today after the company announced a major deal for zero-emission haulage trucks.
The S&P/ASX 200 Index (ASX: XJO) is also up by 0.93% at the time of writing.
Fortescue has a decarbonisation goal of being net zero in terms of its scope 1 and scope 2 emissions by 2030. A partnership with Liebherr, one of the world’s largest construction machine manufacturers, has been revealed and it’s seen as a “significant step” by Fortescue’s CEO.
The Fortescue share price is on the rise after the company announced after market close yesterday that it will purchase 120 haul trucks from Liebherr, with the delivery aligned with its fleet replacement and sustaining capital expenditure forecast.
The commitment to buy 120 trucks represents around 45% of its current operations haul truck fleet.
The partnership is also about developing ‘green’ mining haul trucks for integration with the zero-emission power system technologies being developed by Fortescue Future Industries (FFI) and Williams Advanced Engineering (WAE).
The ASX mining share noted this “accelerates the opportunity to commercialise zero-emission power system technologies in heavy industry applications”.
In terms of Fortescue’s own emissions, truck haulage used approximately 200 million litres of diesel in FY21 and accounted for 26% of the company’s scope 1 emissions.
When will the trucks be delivered?
The phased supply of haul trucks is expected to start after a two-year joint development period which will enable the development and integration of Fortescue’s proprietary-owned power system into Liebherr’s truck base.
Liebherr will supply mining haul trucks to the ASX mining share in both battery electric truck and fuel cell electric truck configurations, as per Fortescue’s requirements.
It’s expected the first of the zero-emission haul units will be “fully operational” at the company’s mining sites by 2025, with another goal of having the units available for commercial sale from that time.
Decarbonising Fortescue’s operations and monetising the development efforts by FFI are two of Fortescue’s biggest focus areas right now.
Fortescue CEO Elizabeth Gaines said:
The signing of this contract with Liebherr makes a significant step in the delivery of our industry-leading decarbonisation target to achieve net zero scope 1 and 2 emissions by 2030.
We strongly believe that enhancing technology is key to addressing climate change and we are investing in renewables and new decarbonisation technologies to transform our mining fleet to run on green renewable energy.
This agreement builds on the considerable value already created through Fortescue’s acquisition of WAE and demonstrates the significant long-term opportunity for Fortescue to commercialise green power system technologies to the broader heavy duty mobility market.
Gaines went on to say these will be some of the world’s first zero-emission large mining haul trucks. She said it was aimed at establishing an important new business growth opportunity as it pivots to becoming an integrated green energy and resources company.
Fortescue share price snapshot
Prior to today’s movement, the Fortescue share price was flat in 2022, having gone up by just 0.2%.
It is down 11.5% over the past year but is up 7% over the past month.
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