Analysis: Fortescue's great energy pivot

Iron ore was a notable absentee from the first half of the slide deck presented by Fortescue chair and founder Andrew Forrest to the company’s AGM in Perth today.

Far from its foundations through the mid-2000s, when Fortescue was famously billed as the “third force” in iron ore, the company’s main money spinner was today buried back in the ground.

It was not until the 17th page of the slide deck that the commodity was mentioned, in writing, by name. 

Here, Fortescue’s breadwinner was presented as one part of the “next generation of Fortescue”, alongside energy, technology and metals. 

That came on the same morning as Fortescue announced its first ‘green grid’ customer, in fellow miner PLS Group, which has signed up to plug into its vast renewable network in the Pilbara region. 

What should be clear by now, if it is not already, is that Fortescue is positioning itself to be an energy business, potentially as much as a miner, in the years ahead. 

This is not Fortescue’s first dalliance with a product other than iron ore. 

A few years ago it was leading the charge in green hydrogen, committing hundreds of millions in its pursuit of market leadership in that fledgling space.

The cooling on hydrogen led to a refocus on renewables, which would have been required to produce said hydrogen, and part of a sector-leading $US6.2 billion investment in decarbonisation.

Hydrogen remains on the radar, but not as soon as first planned.

Power is now the product. 

Dr Forrest’s slides said as much. 

“Energy is the next great commercial engine of this company,” the deck proclaimed.

The AGM coincided with the long-speculated announcement of PLS’ engagement as Fortescue’s first power customer. 

For 20 years the lithium miner will pay the Forrest-led company for access to clean power, from a vast renewable network built initially to fuel Fortescue’s own operations. 

Fortescue wants more energy customers.

“We started building the green grid for our own operations, but we could see strong demand for cheap, green, reliable power across the Pilbara and an opportunity to supply other customers too,” Fortescue CEO Dino Otranto said this morning.

“This agreement is an important first step and cements our role as an energy supplier. 

“It will help power PLS’ expansion, support economic growth in the region, and create a new, long-term revenue stream for Fortescue. 

“PLS is our first customer, with a strong pipeline of others across the Pilbara looking to our green grid for greater choice and flexibility in how they source their power.” 

That raises several questions – for the iron ore miner and the state. 

NWIS vs green grid 

PLS has championed network access as the best path forward at what will be – after a planned major expansion – the largest hard-rock lithium mine in the world. 

That should raise questions over the state’s plans in the Pilbara. 

The delivery of a decarbonised North West Interconnected System, connecting industry-led renewable projects to a common user network to power hard-to-abate projects, remains in planning. 

The state and federal governments hope the NWIS will decarbonise the region by 2050.

Meanwhile Fortescue has set a “real-zero” emissions target of 2030 and has declared its hand as a power aspirant in a region crying out for efficient, reliable supply. 

Other miners may ask the question of Fortescue, which has also spent time promoting its minesite electrification software and has repeatedly taken jabs at its industry peers for a lack of progress on emissions reduction.

If PLS’ move to connect to Fortescue’s network reflects a broader willingness from industry to tap the latter’s renewable supply, then questions should and will be asked of the government’s NWIS transmission vision.

Energy and Decarbonisation Minister Amber-Jade Sanderson said today that she welcomed the PLS-Fortescue deal.

"It's a great step forward in the North West," she said. 

"We want to encourage the resource sector and others to build out large scale renewable energy across the Pilbara to replace our relience on diesel."

Tenure limitations

Earlier in 2026, Fortescue raised eyebrows when it declared a plan to sell power to data centres from its renewables network.

The only major established Pilbara resources company to have made significant green energy project under the Mining Act, it may have its work cut out. 

Building projects under the Act means the company is subject to less rigorous approvals frameworks than it would be under the Land Administration Act.

But the terms of the Mining Act specify that energy can be used only for ‘mining-related purposes’.

That could hamper the data centre vision.

But Fortescue is publicly confident of a change to the rules in its favour. 

“At the moment, we are prevented from selling electrons from the mining tenure, which kind of doesn't make sense,” Mr Otranto said at a Business News event in July.

“It is an archaic piece of legislation, which I think is a mere formality it will change.”

Until it does, there is a grey area which means Fortescue can supply energy for uses other than mining – at the government’s discretion. 

If data centres are one day built in the Pilbara, there’s a chance they are powered using Fortescue’s renewable grid. 

Iron ore 

The energy pivot comes as the state’s iron ore miners appear to fall out of love, to some extent, with their commodity of choice. 

Negotiations with cartel-like Chinese state-owned buyers over the currency in which purchases are made, as well as a tapering off in the metal’s price and fears of a market glut, have led big producers looking to diversify. 

BHP’s future focus is heavily on copper, where it has identified an opportunity driven by the world’s electrification, digitisation and decarbonisation.

At Rio Tinto the view has also been forward-looking, towards copper and lithium – the latter of which has been a focus for Rio but not for BHP.

That left Fortescue as the largest iron ore miner without an obvious mined commodity to turn to. 

Earlier this month, the miner warned that an impasse in its negotiations with China could lead it to scale back iron ore operations by the end of the year.

Based off today’s messaging to shareholders who have “stuck with us through thick and thin”, Fortescue’s diversification may be something else entirely.  

“Where the world is going isn’t iron ore,” Dr Forrest said in his AGM address today.

“It is going to depend on iron ore, which we’re going to be able to supply.

“What it can’t depend on, as you’ve seen, is energy.

“Energy is now the most important commodity on Earth.”