Mining tycoon Andrew Forrest is making strides in establishing a battery manufacturing hub in the United States, aligning with Fortescue Future Industries’ strategic vision to leverage President Joe Biden’s $550 billion Inflation Reduction Act.
Forrest’s plans include expanding UK-based engineering firm WAE, which he acquired last year, into a comprehensive operation spanning three sites in Oxfordshire.
Forrest recently hinted at WAE’s potential US expansion, and it now appears that the plan is on the verge of realization, with the selection of an American location imminent. Speaking during a visit to London, Forrest affirmed his commitment, stating, “This is a tangible endeavour.
We are mobilising capital, equipment, and expertise.” He emphasised the compelling advantages of investing in the United States, fuelled by the substantial incentives available.
The driving force behind Forrest’s strategic move into the US market is President Biden’s Inflation Reduction Act (IRA). Enacted by Congress last year, the IRA offers a range of incentives, including subsidies, grants, and tax breaks, to businesses engaged in the clean-energy transition.
Acknowledging the significance of these incentives, Forrest remarked, “It’s undeniably driven by the IRA. As responsible stewards to external shareholders, we must develop manufacturing capabilities globally, with a particular focus on the United States due to its highly attractive incentives.”
Fortescue’s acquisition of Williams Advanced Engineering (WAE) in March 2022 played a pivotal role in its battery and powertrain development endeavours for electric vehicles.
As a subsidiary of Fortescue, WAE is currently engaged in the construction of electric versions of Liebherr mining trucks, aimed at replacing Fortescue Metal Group’s diesel fleet in the Pilbara region. Once WAE establishes its presence in the US, the focus of the UK operations will gradually shift towards supplying European truck manufacturers.
During a recent business gathering in London, Forrest met with President Biden, King Charles III, and other government leaders at Windsor Castle to discuss enhanced measures for tackling climate change. Demonstrating an increased sense of urgency, Forrest issued a warning that the impending El Niño weather event could serve as a tipping point, potentially resulting in a 1.5-degree Celsius rise in global warming within the coming year.
Urging leaders of the US, China, and India, Forrest advocated for the establishment of a global green armistice, whereby the production and distribution of zero-pollution renewable energy would be conducted without geopolitical considerations.
Forrest also unveiled a comprehensive “climate mobilisation” blueprint, backed by a total investment of $50 billion across his mining and energy companies, investment vehicles, and philanthropic initiatives. Fortescue Metals Group has allocated $6.2 billion towards decarbonising its Australian iron ore operations and an additional $4 billion to ensure the implementation of fossil fuel-free projects worldwide.
Fortescue Energy plans to invest approximately $20 billion in renewable energy projects, while earmarking an additional $30 billion for advanced study projects in Africa, Australia, Europe, and Latin America. These initiatives will be financed through the rapidly evolving green structured finance global capital markets.
In parallel, Tattarang and Squadron Energy will spearhead $20 billion worth of renewable energy projects in Australia, contributing to 30% of the country’s national 2030 target. Minderoo Foundation, Forrest’s philanthropic entity, has dedicated $7.6 billion to various initiatives, including bushfire detection and response, as well as methane reduction and sequestration projects on Forrest’s properties.
The blueprint outlined by Forrest encompasses several key actions, such as fostering training and skills development in green hydrogen, mobilising additional sources of private capital for green initiatives, and promoting battery technology and green industries in emerging markets and territories.
With substantial investments and government incentives on their side, Andrew Forrest’s Fortescue Future Industries is poised to play a significant role in the global clean-energy transition, capitalising on President Biden’s green agenda and striving for a sustainable future.