Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Just this past week for TOSCU, the world's fourth biggest
Speaker 2: iron ore miner, saying it will pay two point eight
Speaker 2: billion to replace two thirds of its fleet of hollage
Speaker 2: trucks and equipment in Western Australia with EV versions as
Speaker 2: it seeks to cut diesel consumption and meet ambitious emissions
Speaker 2: reduction targets. There's a lot going on.
Speaker 1: Yeah, there sure is, and look we've got lots to
Speaker 1: talk to Andrew Farist about it, joins us in studio,
Speaker 1: executive chairman and billionaire of Perth, Australia based Fordescu in
Speaker 1: town this week during the U and General Assembly and
Speaker 1: Climate Week as well. Welcome to Bloomberg Business Week. How
Speaker 1: are you? I'm on fire?
Speaker 3: Thank you.
Speaker 1: I'm just an exciting place right now. It certainly is.
Speaker 1: And look at a time that we're going to talk
Speaker 1: about your climate transition plan a moment, because that's a
Speaker 1: really interesting conversation. We've spent all week talking about China
Speaker 1: and the stimulus efforts being made there, and this is
Speaker 1: a story that's very central to your business as well.
Speaker 1: Imported iron or used in roughly of eighty percent of
Speaker 1: Chinese steel production. Talk to us about the picture that
Speaker 1: you're seeing of the Chinese economy from you're a side
Speaker 1: of the business and the demand. How bad is it? Oh? Oh?
Speaker 1: How good is I mean?
Speaker 3: Basically, you've had mining companies being fat, dumb and happy
Speaker 3: for a very long time because the anal price has
Speaker 3: been so good. So we're all heroes. But now, oh
Speaker 3: my god, the annual price is fallen, which means it's
Speaker 3: a lot better value, by the way, for the customer,
Speaker 3: and we have to work a lot harder as mine is.
Speaker 3: We have to work harder to actually make a margin.
Speaker 3: And that's a good thing. And when people think that
Speaker 3: one throe, they think, well, how do I lower my margins? Well,
Speaker 3: one third of my cost is diesel fuel one third, right,
Speaker 3: one third. Imagine if we get rid of that. Oh,
Speaker 3: by the way, we'd also be going zero missions if
Speaker 3: we did that. So we've been working on this for
Speaker 3: years and years and years, and to give you an
Speaker 3: idea of how strong that demand is, because people are
Speaker 3: looking hard at their operating costs. Now, we took years
Speaker 3: and years to get up at three hundred and sixty
Speaker 3: truck order. Now these are big trucks, right, you've got
Speaker 3: the hub caps starting at the roof here, and yesterday
Speaker 3: we signed another hundred and got walkins for another four
Speaker 3: hundred in our day. So from three or four years
Speaker 3: for three sixty for a day for another five hundred.
Speaker 3: So this is showing you that the mining industry is saying, hey,
Speaker 3: we've got to really look at operating costs and fortescue
Speaker 3: and Middle East driven because it wanted to go zero
Speaker 3: missions because we bloody will have to as a human race.
Speaker 3: But then we also have to prove that it's highly commercial.
Speaker 3: And what you're seeing happen yesterday and today is that
Speaker 3: going zero missions is highly commercial.
Speaker 1: To just say you're not worried about China.
Speaker 3: I mean, I've just come from China and I've just
Speaker 3: I mean, I get accused when I'm in Chinese, when
Speaker 3: i'm a China being very pro North American. When I'm
Speaker 3: in North America, I get accutes of being v being
Speaker 3: very pro China.
Speaker 1: So no, but this is interesting. Look and love you both.
Speaker 1: The narrative is so negative and has been for so long.
Speaker 3: The problem I'm afraid you're wrong.
Speaker 1: You are wrong.
Speaker 3: I mean, here in North America, you haven't completely different system.
Speaker 3: You get lag effects and lowering interest rates and things
Speaker 3: like that, and it's macroeconomic policy and it works really
Speaker 3: well over a long time. If they want to hit
Speaker 3: the accelerator, hit the brakes, you know, you see the
Speaker 3: impact straight away. So they did a little bit of priming,
Speaker 3: not much. I going to say as a percentage of GDP,
Speaker 3: you'd be hard to measure it. But that is kicked
Speaker 3: investments straight away. It's kicked the iron or price, kicked
Speaker 3: iron or demand.
Speaker 1: It's a five percent growth and art a concern. It's
Speaker 1: going to happen.
Speaker 3: Look, I'm completely not worried about it. And by the way,
Speaker 3: if it's four or six, I know big countries who'd
Speaker 3: love to get two or three. So you know, for
Speaker 3: our demand, I'm seeing the iore price come down and
Speaker 3: I'm saying good.
Speaker 2: So Andrew, Basically what you're saying is China's like, Okay,
Speaker 2: if there still isn't enough, we're going to do more.
Speaker 1: Yeah.
Speaker 3: And also, you know, I love North America because we're
Speaker 3: aligned with North America. I love China because they're actually
Speaker 3: leading the world on going green. I mean, they are
Speaker 3: way ahead of their own plan. And you know everyone,
Speaker 3: I mean North America and China kicking the hell out
Speaker 3: of each other is really bad for the overall human race.
Speaker 3: This geostrategic war between North America precipitate, I want to
Speaker 3: put it bluntly by North America. And look, China does
Speaker 3: all these things wrong too, and you can jump on
Speaker 3: their toes, but you jump on their toes in private.
Speaker 3: You don't do it by shouting at them from New
Speaker 3: York or Washington DC.
Speaker 2: Well, does that then worry you about who's in the
Speaker 2: White House come November, because there is people who have
Speaker 2: a softer touch and people who don't.
Speaker 3: Fortescue has a policy that we deal with any elected
Speaker 3: leadership that usuckers want to put up right. So you know,
Speaker 3: if you want to put up Trump, I've got to
Speaker 3: say this Ukraine badge. If there's a deal cut which
Speaker 3: rewards an invader for invading a country which you've had
Speaker 3: as an enemy for eighty years, and you go cut
Speaker 3: a deal and reward a bad guy for being bad,
Speaker 3: We're down in the Pacific and we're going to say
Speaker 3: hold the phone. If you're going to trade Ukraine against Russia.
Speaker 3: Where do we sit with North America? I mean where
Speaker 3: do we sit? I mean, who do we not call
Speaker 3: a friend if you're going to turn around and do
Speaker 3: that to Europe.
Speaker 1: Right, I mean, you're obviously very plugged into geopolitical tensions
Speaker 1: because it's part of what affects your business as well.
Speaker 1: When you're thinking about global climate solutions, and you gave
Speaker 1: us some of the outlines of your plan there as well.
Speaker 1: There's some people that are going to think it's highly
Speaker 1: ironic that a mining company would be looking at a
Speaker 1: green transition. I agree with them. What you know, green
Speaker 1: iron or what is that is? That is? Do these
Speaker 1: things really make a difference when it comes to the
Speaker 1: bottom line of limiting climate change.
Speaker 3: Let's start with three million tons of carbon docks, so
Speaker 3: I'm not going out in the atmosphere. I mean, let's
Speaker 3: just start there and then and then let's realize that
Speaker 3: no one say ever going to make green iron or
Speaker 3: green steel, which is ten percent of the carbon budget.
Speaker 3: Now we're talking huge unless you start with green iron
Speaker 3: or so the fact we're going to green iron or
Speaker 3: within a few years means that we can then go
Speaker 3: to green iron or green steel. Now that's starting to
Speaker 3: have a massive impact because we do that economically, Then
Speaker 3: the pollution which has currently suffered all over the world,
Speaker 3: particularly in China, where they put their steel mills on
Speaker 3: the outskirts of their cities central plan, but their cities
Speaker 3: grew so much bigger. So now the steel mills inside
Speaker 3: the city, we send them totally pollution free metal. Their
Speaker 3: pollution problem goes out the window, so that there is
Speaker 3: a really big impact on this slow lethargic backward industry
Speaker 3: called mining, ironically leading the world to go green, and
Speaker 3: it's hitting where the pollution is worst. And it's not saying, oh, well,
Speaker 3: we've got to continue burning all in gas because there's
Speaker 3: such lovely people and we have to look after and
Speaker 3: we're saying, actually, oil and gas has got us into
Speaker 3: this manure. We've got to stop doing what we've always
Speaker 3: done if we want a different result, and switch off
Speaker 3: the oil and gas, and then we'll get a different result.
Speaker 3: And that's like green steel, that's like green shipping.
Speaker 2: Now exactly though, is green iron ore? And what does
Speaker 2: it cost versus other iron ore? And is a competitive.
Speaker 1: Yeah, it's going to cost less.
Speaker 3: Man, it's because we can make it for less, because
Speaker 3: we're not chopping through a billion a billion leaders of
Speaker 3: diel like nearly five hundred million gallons of diesel. We're
Speaker 3: not going to buy anymore, you know, because we're making
Speaker 3: it ourselves.
Speaker 2: So is it cost competitive already?
Speaker 1: Yeah?
Speaker 3: Hell yeah, yeah yeah, that's the beauty of it, which
Speaker 3: is why I'm saying, listen, stop looking at gying green,
Speaker 3: stop looking at zero missions as Oh, you're a really
Speaker 3: nice guy. What a lovely chief executive, What a lovely
Speaker 3: politician thinking of the kids, not himself. Actually, get out
Speaker 3: of your hole. This is a great investment. You should
Speaker 3: be doing this for your shareholders. And if you say
Speaker 3: you can't go green, well you're right, get off the
Speaker 3: stage and let on someone smarter who can.
Speaker 1: But why isn't everyone doing it? If the case is
Speaker 1: that simple, and done it sooner?
Speaker 3: Because everything starts somewhere, right, everything starts somewhere. I'm in
Speaker 3: the suit, you're you're getting started with a thread, mate,
Speaker 3: It turned out to be a suit, So we're the thread.
Speaker 1: Talking about the conversations you're having here in New York
Speaker 1: as well. Are people getting the message? People are getting
Speaker 1: the message?
Speaker 3: Yeah?
Speaker 1: I mean, you know, we look at the pullback on
Speaker 1: green agenda and so many parts of the world at
Speaker 1: the moment we see it reflected and polling and election results.
Speaker 3: Is that playing. That's an opportunity for US. Okay, that's
Speaker 3: a serious opportunity. I mean, we are pushing head going
Speaker 3: green as quickly as possible. We've got technology which can
Speaker 3: take the water in here side a steirly water bottle,
Speaker 3: turn it into the most powerful fuel the Wall's ever had,
Speaker 3: which is hydrogen. When we turn it from gas liquid
Speaker 3: to really serious energy except stack to water. And we're
Speaker 3: working out how to produce that. It's not pure we
Speaker 3: call it industrial hydgen, but.
Speaker 1: A fraction of the cost.
Speaker 3: Where we've worked out already how to charge cars not
Speaker 3: in twenty two hours or even eight hours, but in
Speaker 3: twenty two seconds, okay, And these are the fastest electric
Speaker 3: cars in the world, like Formulae winners all the time.
Speaker 3: We've worked out how to charge our huge trucks in
Speaker 3: twenty four minutes. And I've had your US general say
Speaker 3: to me, hey, hey, you understand the US military can
Speaker 3: never go grannis it. Why mate, They said, well, our
Speaker 3: tanks they're fifty sixty tons and they've got to go
Speaker 3: fifty mile an hour. And I said, well, hang on, mate,
Speaker 3: our trucks are four hundred tons and they've got to
Speaker 3: go sixty mile an out they're green. And they've said, well,
Speaker 3: you know, shipping shipping our warships. Our warships are like
Speaker 3: one hundred meters long. Andrew I said, honestly, mate, we
Speaker 3: could put three your warships on the back of our
Speaker 3: iinor carriers. They're three hundred and thirty meters long, and
Speaker 3: we're sending them green so everyone can go green.
Speaker 2: I am curious if you guys are going to be
Speaker 2: also building wind farms, solar forums right next farms excuse me,
Speaker 2: right next to some of your minds to help supply
Speaker 2: green power, Like, what's is that part of the process.
Speaker 3: Yeah, it is. It is absolutely and will supply power
Speaker 3: us and powder to others. Right now, we're operating a
Speaker 3: green grid. It's the first fully independent green grid in
Speaker 3: the world. It will be the largest, of course, because
Speaker 3: it'll be producing enough power the size of small countries
Speaker 3: and it'll be a full grid, but it'll be off
Speaker 3: the standard grid and that means that we can put
Speaker 3: this all.
Speaker 1: Over the world. I want to come back to hydrogen
Speaker 1: because it's it's been talked about from years, has been
Speaker 1: a lot of money put behind us, yet to yield results.
Speaker 1: Where are the obstacles there? How far away is it
Speaker 1: from being something that's going to be widespread, available, and
Speaker 1: more heavily used as an energy for them?
Speaker 3: Okay, the only thing stopping the production of green heighten
Speaker 3: North America. I mean, let's just remember that there's more
Speaker 3: people employed in the renewable energy sector in the fossil
Speaker 3: fuel old state of Texas than there are now is
Speaker 3: by fossil fuel. So everything is changing. What we're seeing
Speaker 3: now is the whole growth, this massive growth of green
Speaker 3: heighten green energy being held up by perfect getting in
Speaker 3: the road of the good in the IRA. And if
Speaker 3: we don't fix what a little thing called forty five V,
Speaker 3: which is where the fossil fuel sector's got these environmental
Speaker 3: independent lobbyists to say, hey, look we should have things
Speaker 3: like ali matching. Well, okay, that's perfect.
Speaker 1: Parts of your own industry are working against this.
Speaker 3: Yeah, I mean, but it's not my industry. It's the
Speaker 3: environmental lobby is paid ball by fossil fuel. It's the
Speaker 3: same same draw card, same playble as tobacco used. They
Speaker 3: get so called scientists and to say tobacco doesn't kill you, mate, So.
Speaker 2: It's money again, it's politics. And it's lobby.
Speaker 3: Yeah, and we have to Carol, we have to look
Speaker 3: straight through that and say to your legislators and your legislators,
Speaker 3: I've got to say, actually, we're not going to let
Speaker 3: perfect kill off the good when no green hydrant.
Speaker 1: Is the answer.
Speaker 3: We will have weekly month matching or monthly matching. But
Speaker 3: hourly matching just means the person who came up with
Speaker 3: that's never driven or operated anything more complex than a
Speaker 3: bloody computer, not these one two three mile long plants
Speaker 3: which I.
Speaker 1: Have to operate.
Speaker 2: So thirty seconds left? Are you more optimistic after your
Speaker 2: time here in New York and talking with global leaders
Speaker 2: North American leaders, US leaders? Are you more pessimistic? Just quickly?
Speaker 1: No, I'm more optimistic.
Speaker 3: I'm more optimist because they trust what someone does more
Speaker 3: than what someone says, and they can see we're doing it.
Speaker 3: They can see Australia's high sharehold return company ever is
Speaker 3: going fully green, and there's got to be a reason
Speaker 3: for that. And they're making huge sales and they're profitable.
Speaker 2: We wanted to be smart and fun when you came in.
Speaker 1: Did we do it? Yeah? You're smart and fun. I
Speaker 1: love such pressure.
Speaker 2: Andrew Forrest, thank you so much Executive chair of course
Speaker 2: at Ford ske you joining us right here on Bloomberg
Speaker 2: BusinessWeek