WEBVTT - Getting Real: Net Zero Isn’t Enough for Fortescue

0:00:00.280 --> 0:00:03.159
<v Speaker 1>This is Tom Rowlands Reese and you're listening to Switched

0:00:03.200 --> 0:00:06.160
<v Speaker 1>on the BNF podcast, and today we bring you an

0:00:06.200 --> 0:00:09.320
<v Speaker 1>interview from our BNF Summit Shanghai, which took place on

0:00:09.360 --> 0:00:12.879
<v Speaker 1>the third and fourth of December. On stage Bloomberg Enief's

0:00:12.920 --> 0:00:15.720
<v Speaker 1>Head of Australia Research, Lenard Quong, was joined by one

0:00:15.760 --> 0:00:18.759
<v Speaker 1>of the most recognizable names in metals, mining and now

0:00:18.880 --> 0:00:22.800
<v Speaker 1>green molecules, the founder and executive chairman of Fortescue, Dr

0:00:22.840 --> 0:00:26.279
<v Speaker 1>Andrew Forrest. Clean energy and low carbon tech requires the

0:00:26.320 --> 0:00:29.159
<v Speaker 1>metals and minerals that companies like for Toscu provide, but

0:00:29.320 --> 0:00:32.479
<v Speaker 1>major miners are finding that their net zero ambitions are

0:00:32.560 --> 0:00:36.920
<v Speaker 1>under pressure from shareholders seeking to maximize returns. Nevertheless, for

0:00:37.080 --> 0:00:40.000
<v Speaker 1>Toscu has positioned itself to be both a global metals

0:00:40.040 --> 0:00:42.880
<v Speaker 1>and green energy company. By twenty thirty, they aim to

0:00:42.920 --> 0:00:45.800
<v Speaker 1>have their Australian iron ore operations running on green energy,

0:00:45.960 --> 0:00:48.360
<v Speaker 1>and more importantly, they are looking to achieve this with

0:00:48.440 --> 0:00:51.360
<v Speaker 1>real zero terrestrial emissions for Scope one and two, while

0:00:51.360 --> 0:00:54.200
<v Speaker 1>holding a net zero Scope three target by twenty forty.

0:00:54.600 --> 0:00:57.360
<v Speaker 1>Doctor Forrest discusses how he intends to see these goals

0:00:57.400 --> 0:01:00.120
<v Speaker 1>come to fruition, while also taking time to discuss it's

0:01:00.160 --> 0:01:03.280
<v Speaker 1>the economic viability of green hydrogen in a CCS world,

0:01:03.320 --> 0:01:06.400
<v Speaker 1>and his opinions on global tariffs. Now, let's hear from

0:01:06.480 --> 0:01:08.440
<v Speaker 1>Lenny's interview with Dr Andrew.

0:01:08.120 --> 0:01:21.560
<v Speaker 2>Forrest Nay, Doctor Forest, and welcome to our tenth Bloomberg

0:01:21.680 --> 0:01:24.840
<v Speaker 2>ne EF Shanghai Summit. It is our pleasure to have

0:01:24.920 --> 0:01:27.880
<v Speaker 2>you here with us today and this is a conversation

0:01:27.920 --> 0:01:30.240
<v Speaker 2>I've been looking forward to for quite some time, and

0:01:30.240 --> 0:01:31.679
<v Speaker 2>I figured what better way to do it than to

0:01:31.720 --> 0:01:35.280
<v Speaker 2>meet seven thousand kilometers from home in front of seven

0:01:35.360 --> 0:01:37.479
<v Speaker 2>hundred of my closest friends.

0:01:37.880 --> 0:01:39.399
<v Speaker 3>Now, I think most people in this.

0:01:39.360 --> 0:01:41.920
<v Speaker 2>Room will know you from your work with Fortescue, where

0:01:41.920 --> 0:01:45.199
<v Speaker 2>you're a founder executive chairman. You've been operating the company

0:01:45.200 --> 0:01:48.760
<v Speaker 2>for over twenty years now, congratulations on your anniversary last year,

0:01:49.400 --> 0:01:51.680
<v Speaker 2>and over that time you've grown Fortescue into the world's

0:01:51.920 --> 0:01:55.120
<v Speaker 2>fourth largest iron ore company, shipping over one hundred and

0:01:55.240 --> 0:01:59.400
<v Speaker 2>ninety million tons of product last year and over that period,

0:01:59.400 --> 0:02:01.840
<v Speaker 2>I think Forest has been the highest returning company on

0:02:01.880 --> 0:02:04.640
<v Speaker 2>the Australian Stock Exchange and an incredible feat.

0:02:04.960 --> 0:02:06.680
<v Speaker 3>But an introduction of you.

0:02:06.880 --> 0:02:11.959
<v Speaker 2>As an Australian iron or magnate just seems manifestly inadequate

0:02:12.120 --> 0:02:16.680
<v Speaker 2>because your company, your portfolio of organizations, you're operational in

0:02:16.919 --> 0:02:19.880
<v Speaker 2>almost every continent in the world, across a wide variety

0:02:19.880 --> 0:02:24.400
<v Speaker 2>of commodities and products. On a personal level, you're a philanthropist,

0:02:24.760 --> 0:02:29.120
<v Speaker 2>you have a doctorate in marine science. You're a climate warrior,

0:02:29.680 --> 0:02:36.960
<v Speaker 2>a green energy pioneer, a green hydrogen evangelical. You're a jackaroo,

0:02:37.320 --> 0:02:40.600
<v Speaker 2>son of a jackaroo from a foul, proud family of jaqueline.

0:02:40.680 --> 0:02:41.360
<v Speaker 4>Say what that is?

0:02:41.880 --> 0:02:42.920
<v Speaker 3>That's an Australian jokes.

0:02:43.000 --> 0:02:45.560
<v Speaker 2>Apologies to the translators for that one, but we can

0:02:45.600 --> 0:02:49.040
<v Speaker 2>google it later on. But amongst all of the long,

0:02:49.240 --> 0:02:52.800
<v Speaker 2>long list of accolades, perhaps rarest of all, at least

0:02:52.919 --> 0:02:56.680
<v Speaker 2>in my eyes, is you're a believer in real zero.

0:02:57.520 --> 0:03:00.200
<v Speaker 2>And that's where I'd love to start today's conversation. Could

0:03:00.200 --> 0:03:02.440
<v Speaker 2>you tell me what is real zero?

0:03:02.600 --> 0:03:03.079
<v Speaker 3>How does it.

0:03:03.040 --> 0:03:05.440
<v Speaker 2>Differ from the more conventional I guess you could say

0:03:05.560 --> 0:03:06.120
<v Speaker 2>net zero?

0:03:06.560 --> 0:03:08.720
<v Speaker 3>And why is that the right target for you and

0:03:08.720 --> 0:03:09.440
<v Speaker 3>for for toescue?

0:03:09.919 --> 0:03:13.200
<v Speaker 4>Okay, so let's start with a solution, the.

0:03:15.440 --> 0:03:22.600
<v Speaker 5>Solution to global warming and climate change for all future generations,

0:03:22.840 --> 0:03:29.640
<v Speaker 5>but particular poisoning, atmospheric poisoning for citizens today is the

0:03:29.680 --> 0:03:35.200
<v Speaker 5>ability to stop burning fossil fuel. If you stop burning

0:03:35.240 --> 0:03:40.000
<v Speaker 5>fossil fuel, then you gather up everything else like agricultural emissions, etc.

0:03:42.440 --> 0:03:45.440
<v Speaker 5>You make sure the perfect doesn't get in the road.

0:03:45.520 --> 0:03:51.120
<v Speaker 5>Is the very, very good, and it is an economically

0:03:51.160 --> 0:03:56.960
<v Speaker 5>attractive opportunity for every company in the world. It say, Okay,

0:03:58.040 --> 0:04:01.720
<v Speaker 5>i'll invest the capital to build out my own green

0:04:01.840 --> 0:04:06.800
<v Speaker 5>energy system. It'll have a lump of capital upfront, but

0:04:06.880 --> 0:04:10.800
<v Speaker 5>from that point on you'll be saving money every year

0:04:10.880 --> 0:04:14.400
<v Speaker 5>from not buying fossil fuel, which in Fortescu's case is

0:04:14.680 --> 0:04:15.560
<v Speaker 5>one third of our.

0:04:15.480 --> 0:04:18.040
<v Speaker 4>Operating cost, which is billions.

0:04:18.320 --> 0:04:22.440
<v Speaker 5>And so from that point on we're saving around of

0:04:22.520 --> 0:04:26.200
<v Speaker 5>billion dollars a year on a six billion dollar investment, and.

0:04:26.120 --> 0:04:27.000
<v Speaker 4>We save it forever.

0:04:28.040 --> 0:04:32.080
<v Speaker 5>So it is a very economic proposition to stop burning

0:04:32.080 --> 0:04:35.320
<v Speaker 5>fossil fuel. Invest in the equipment you need to do that,

0:04:36.240 --> 0:04:39.320
<v Speaker 5>amortize it or repay it over ten fifteen years as

0:04:39.320 --> 0:04:41.800
<v Speaker 5>you like, and you'll find you've created a lot of

0:04:41.880 --> 0:04:44.800
<v Speaker 5>value for shareholders. Also doing the right thing by your

0:04:44.880 --> 0:04:47.080
<v Speaker 5>kids and by your fellow citizens.

0:04:48.000 --> 0:04:50.960
<v Speaker 2>This is a question within that in historically many have

0:04:51.040 --> 0:04:54.159
<v Speaker 2>found as a chairman, a board, an executive and certainly

0:04:54.200 --> 0:04:57.360
<v Speaker 2>as a representative of shareholders, the main priority needs to

0:04:57.400 --> 0:04:58.120
<v Speaker 2>be those returns.

0:04:58.120 --> 0:04:59.679
<v Speaker 3>It needs to be the performance of the company.

0:04:59.760 --> 0:05:02.760
<v Speaker 2>And some might find that could come in the absence

0:05:02.839 --> 0:05:04.600
<v Speaker 2>of doing the right thing for your kids.

0:05:04.600 --> 0:05:07.040
<v Speaker 3>As you just said, it sounds like you found a way,

0:05:07.160 --> 0:05:09.080
<v Speaker 3>and in fact it is the right way to wed

0:05:09.160 --> 0:05:11.160
<v Speaker 3>those together. You need to do the right thing.

0:05:11.200 --> 0:05:14.600
<v Speaker 2>You need to deliver on this decarbonization from a company perspective.

0:05:14.839 --> 0:05:16.440
<v Speaker 3>What was that process like for.

0:05:16.320 --> 0:05:18.080
<v Speaker 2>You, And perhaps there's advice for those in the room

0:05:18.080 --> 0:05:20.400
<v Speaker 2>who might want to mirror that level of ambition. How

0:05:20.400 --> 0:05:23.320
<v Speaker 2>did you convince those stakeholders that this was the right target.

0:05:23.839 --> 0:05:26.080
<v Speaker 4>Okay, so there's two things to play here.

0:05:26.360 --> 0:05:29.760
<v Speaker 5>One is the absolute certainte of global warming, and that

0:05:29.800 --> 0:05:31.920
<v Speaker 5>when there is mass death and I'm afraid to say

0:05:31.960 --> 0:05:37.120
<v Speaker 5>that we've had mass death cumulatively from the impact of

0:05:37.520 --> 0:05:43.400
<v Speaker 5>humidity on populations who cannot get air conditioning, or extreme floods, fires,

0:05:43.400 --> 0:05:48.720
<v Speaker 5>et cetera. That the atmosphere is supercharged with moisture and

0:05:48.760 --> 0:05:51.800
<v Speaker 5>it's hot, and that is of course because of the

0:05:51.839 --> 0:05:56.960
<v Speaker 5>accelerating heat in the atmosphere. But the bigger question is

0:05:57.000 --> 0:06:00.680
<v Speaker 5>that the planetary boundaries which absorb carb and go oxside,

0:06:00.720 --> 0:06:05.560
<v Speaker 5>ocean's land, anything you like. They're starting to reach saturation

0:06:05.680 --> 0:06:09.760
<v Speaker 5>point at exactly the same time that fossil fuel emissions

0:06:09.839 --> 0:06:14.200
<v Speaker 5>are going at the opposite direction, accelerating at an accelerating rate.

0:06:14.920 --> 0:06:17.359
<v Speaker 5>So you know for certain that governments are going to

0:06:17.360 --> 0:06:20.599
<v Speaker 5>move on this. They're not going to watch their citizens

0:06:20.640 --> 0:06:25.599
<v Speaker 5>get savagely harmed just because our company's got more lobbyists

0:06:25.600 --> 0:06:27.919
<v Speaker 5>than someone else. Eventually it'll come down to the people

0:06:27.960 --> 0:06:31.640
<v Speaker 5>and they'll change governments or they'll change policy. So that

0:06:31.839 --> 0:06:35.320
<v Speaker 5>certainly is with us, but even more certain for a

0:06:35.520 --> 0:06:38.839
<v Speaker 5>chief executive, and we can be pretty short sighted, not

0:06:38.880 --> 0:06:41.279
<v Speaker 5>only more short sighted out there's probably a politician.

0:06:43.360 --> 0:06:45.240
<v Speaker 4>That's a joke of my political friends.

0:06:46.080 --> 0:06:51.120
<v Speaker 5>But the certainty of the economics of going fully green

0:06:52.080 --> 0:06:53.840
<v Speaker 5>is obvious now.

0:06:54.000 --> 0:06:56.239
<v Speaker 4>The fact that we can build out our systems.

0:06:56.240 --> 0:07:00.160
<v Speaker 5>Companies in China can build out their systems and save money,

0:07:00.400 --> 0:07:04.520
<v Speaker 5>deliver their shareholders, their citizens a low cost and predictable

0:07:04.640 --> 0:07:10.000
<v Speaker 5>form of energy. And this has really macro implications. If

0:07:10.040 --> 0:07:16.440
<v Speaker 5>you look at the pre eminence of China's economy centuries

0:07:16.440 --> 0:07:20.920
<v Speaker 5>ago on a global basis and the rise of other powers,

0:07:21.240 --> 0:07:25.120
<v Speaker 5>including North America, and you look now out of North

0:07:25.120 --> 0:07:27.280
<v Speaker 5>America as the largest economy in the world for now

0:07:28.280 --> 0:07:34.680
<v Speaker 5>staring straight down the barrel of going back to fossil fuel. Now,

0:07:34.680 --> 0:07:38.240
<v Speaker 5>that's going to peg their economy to what some oligarch

0:07:38.360 --> 0:07:42.320
<v Speaker 5>or despot or some country who happen to be born just.

0:07:42.240 --> 0:07:44.400
<v Speaker 4>By luck on top of an oil deposit.

0:07:46.000 --> 0:07:48.920
<v Speaker 5>They're going to peg the prices of energy in North

0:07:48.960 --> 0:07:52.120
<v Speaker 5>America to the consumer and to the big investors like me.

0:07:52.240 --> 0:07:53.880
<v Speaker 5>So if I'm looking at a five or six or seven

0:07:53.880 --> 0:07:57.000
<v Speaker 5>billion dollar project in North America and it's pegged to

0:07:57.040 --> 0:08:00.000
<v Speaker 5>fossil fuel pricing, and I have to compete around the world,

0:08:00.680 --> 0:08:03.520
<v Speaker 5>then I know that some oligarch or despots some other

0:08:03.680 --> 0:08:06.360
<v Speaker 5>place in the world could jack up my energy prices

0:08:06.600 --> 0:08:10.000
<v Speaker 5>and put it risk that project and the potentially tens

0:08:10.040 --> 0:08:14.080
<v Speaker 5>of thousands of people I employ just because of that policy.

0:08:14.240 --> 0:08:18.040
<v Speaker 5>On the other hand, those countries going into renewable energy,

0:08:18.960 --> 0:08:22.080
<v Speaker 5>I can invest in much more safely because I can

0:08:22.120 --> 0:08:26.119
<v Speaker 5>see those energy costs both stable and declining over time.

0:08:27.080 --> 0:08:32.559
<v Speaker 5>And this is a great truth. This will speed the transition.

0:08:32.640 --> 0:08:36.240
<v Speaker 5>That historic transition which has not happened for centuries, likely

0:08:36.320 --> 0:08:42.600
<v Speaker 5>to happen comfortably in our generation as one big economic power.

0:08:42.640 --> 0:08:46.320
<v Speaker 5>China goes renewable energy, tracks investment from all over the

0:08:46.320 --> 0:08:48.000
<v Speaker 5>world despite tariffs and etc.

0:08:48.200 --> 0:08:48.360
<v Speaker 2>Etc.

0:08:49.760 --> 0:08:53.400
<v Speaker 4>And countries who stick to fossil fuel, they.

0:08:53.280 --> 0:08:57.280
<v Speaker 5>Will slide back and you'll see this economic transition, but

0:08:57.360 --> 0:09:03.800
<v Speaker 5>it's also a social transition. I have used liberally a

0:09:03.920 --> 0:09:09.240
<v Speaker 5>colorful description of the fossil fuel sector desk spots, oligarchs.

0:09:09.960 --> 0:09:11.719
<v Speaker 4>Countries happen to be like enough to be born on

0:09:11.760 --> 0:09:13.199
<v Speaker 4>top of an all deposit.

0:09:14.760 --> 0:09:17.959
<v Speaker 5>Their authority, which is paramount now, the biggest, most profitable

0:09:17.960 --> 0:09:22.400
<v Speaker 5>industry in human history. Paramount now is quickly being eroded.

0:09:22.960 --> 0:09:25.719
<v Speaker 5>The power is going to renewable energy, and that's households,

0:09:26.559 --> 0:09:30.800
<v Speaker 5>that's companies, that's even governments. They're going to be in

0:09:30.920 --> 0:09:34.800
<v Speaker 5>charge of their own energy. And these take a while

0:09:34.840 --> 0:09:36.600
<v Speaker 5>to build out. You can have a sugar hit with AI,

0:09:36.679 --> 0:09:38.520
<v Speaker 5>you can have a sugar hit with big tech. They're

0:09:38.520 --> 0:09:40.280
<v Speaker 5>going to come and go, and that technology will be

0:09:40.280 --> 0:09:43.280
<v Speaker 5>transferable around the world within a couple of years. But

0:09:43.640 --> 0:09:46.800
<v Speaker 5>building out an energy platform for your economy that takes

0:09:46.960 --> 0:09:49.680
<v Speaker 5>years and decades, and if you're not doing it, you're

0:09:49.720 --> 0:09:50.960
<v Speaker 5>going to come badly second.

0:09:51.920 --> 0:09:56.440
<v Speaker 2>And sounds like there's real opportunity that democratization of energy

0:09:56.760 --> 0:09:59.720
<v Speaker 2>that comes from that clean power evolution that we're seeing.

0:10:00.000 --> 0:10:01.920
<v Speaker 3>I'd love to come back to the question of where you're.

0:10:01.760 --> 0:10:05.080
<v Speaker 2>Seeing the advantages in different markets, particularly here in China.

0:10:05.160 --> 0:10:08.280
<v Speaker 2>But one of the technologies that you have been principally

0:10:08.559 --> 0:10:12.880
<v Speaker 2>behind and supportive is green renewable hydrogen, and that's really,

0:10:13.320 --> 0:10:15.560
<v Speaker 2>in many ways, the step that comes after having that

0:10:15.600 --> 0:10:20.480
<v Speaker 2>abundance of clean, low carbon, low cost power available.

0:10:20.000 --> 0:10:20.920
<v Speaker 3>To you in the market.

0:10:21.440 --> 0:10:24.479
<v Speaker 2>What is it in your eyes that makes green hydrogen

0:10:24.559 --> 0:10:28.719
<v Speaker 2>particularly such a key technology for decarbonization, even in the

0:10:28.760 --> 0:10:31.280
<v Speaker 2>absence of some of the other talted solutions like carbon

0:10:31.320 --> 0:10:34.560
<v Speaker 2>capture and storage. What about it is makes it the winner?

0:10:34.880 --> 0:10:37.360
<v Speaker 4>Well, capture storage is not a solution.

0:10:38.240 --> 0:10:42.360
<v Speaker 5>It's a technical lie waiting for the next idiot to

0:10:42.400 --> 0:10:46.320
<v Speaker 5>come along to believe it. And that's why companies get

0:10:46.400 --> 0:10:49.400
<v Speaker 5>tax payers to pay for it, because they basically know

0:10:49.480 --> 0:10:51.760
<v Speaker 5>it's likely to fail. It does fail nineteen out of

0:10:51.840 --> 0:10:56.160
<v Speaker 5>twenty times. As a statistician, that's failed. So what you

0:10:56.240 --> 0:11:02.800
<v Speaker 5>know does work is renewable energy and green hydrogen is

0:11:03.600 --> 0:11:05.480
<v Speaker 5>if you look at the technology curve of any of

0:11:05.520 --> 0:11:07.280
<v Speaker 5>these great emerging industries, they start like that.

0:11:08.280 --> 0:11:10.680
<v Speaker 4>Now onil and gas is up here.

0:11:11.200 --> 0:11:15.600
<v Speaker 5>It's had that huge run er, horizontal drilling, everything you like,

0:11:16.080 --> 0:11:20.960
<v Speaker 5>better technology, but it's plattered out green. Hydrogen is just here.

0:11:21.400 --> 0:11:24.480
<v Speaker 5>And of course within a snapshot of time, people say, oh,

0:11:24.520 --> 0:11:28.439
<v Speaker 5>well it's too expensive, everyone's gone. Don't you realize this

0:11:28.600 --> 0:11:30.240
<v Speaker 5>war and Ukraine, there's a war in the Middle East.

0:11:30.320 --> 0:11:31.960
<v Speaker 5>I mean, oh my god, we've got to stick to

0:11:32.000 --> 0:11:36.920
<v Speaker 5>what we know. That's actually the time to change, and

0:11:37.920 --> 0:11:41.920
<v Speaker 5>this change is upon us. We're now looking at making

0:11:42.040 --> 0:11:46.240
<v Speaker 5>hydrogen as fortescut a fraction of what we were a fraction.

0:11:46.800 --> 0:11:49.160
<v Speaker 5>And when people say, oh, Twiggi's getting out of hygien

0:11:49.280 --> 0:11:51.520
<v Speaker 5>or he's lost his fam they just don't know me

0:11:52.160 --> 0:11:54.319
<v Speaker 5>where at the start of this curve, ladies and gentlemen.

0:11:54.360 --> 0:11:57.080
<v Speaker 4>And it's going to go like that. Be assured it

0:11:57.160 --> 0:11:58.000
<v Speaker 4>will follow.

0:11:57.760 --> 0:12:02.599
<v Speaker 5>History, and hydrogen costs will come down, I think eventually

0:12:02.920 --> 0:12:07.080
<v Speaker 5>to the price of transportable LNG, and then there'll be

0:12:07.160 --> 0:12:11.120
<v Speaker 5>just no reason whatsoever for any government to encourage their

0:12:11.200 --> 0:12:14.360
<v Speaker 5>citizens to consume an energy which is going to destroy them,

0:12:14.400 --> 0:12:18.080
<v Speaker 5>which is pumping particularly poisoning into the air today, affecting

0:12:18.120 --> 0:12:23.400
<v Speaker 5>their health this afternoon, and their children's future forever when

0:12:23.440 --> 0:12:25.960
<v Speaker 5>they could switch to green hydrogen, that excuse will not

0:12:26.000 --> 0:12:29.600
<v Speaker 5>be there. So I'm really looking forward to that time

0:12:29.640 --> 0:12:32.240
<v Speaker 5>that I can ask to see if they'll see me

0:12:32.960 --> 0:12:37.200
<v Speaker 5>the leadership of the great let's say the great cities

0:12:37.200 --> 0:12:41.160
<v Speaker 5>of China, which suffers steel mills around them, particular poisoning,

0:12:41.400 --> 0:12:47.200
<v Speaker 5>and say the technology is there super powerful charging six

0:12:47.280 --> 0:12:50.680
<v Speaker 5>thousand killer wats an hour, where's the standard is about

0:12:50.720 --> 0:12:55.640
<v Speaker 5>three to five hundred. Is there charging these huge machines

0:12:55.720 --> 0:12:57.600
<v Speaker 5>like our trucks inside thirty minutes?

0:12:57.960 --> 0:13:00.120
<v Speaker 4>Is there charging a family.

0:13:01.360 --> 0:13:04.360
<v Speaker 5>In twenty five seconds that's what we're doing on the

0:13:04.440 --> 0:13:08.640
<v Speaker 5>racing circuit, ladies and gentlemen right now. Is there making

0:13:08.760 --> 0:13:15.319
<v Speaker 5>hydrogen as cheap as commercial energy is coming? And so

0:13:15.520 --> 0:13:18.560
<v Speaker 5>I just advise this all, particularly governments, don't be on

0:13:18.600 --> 0:13:19.560
<v Speaker 5>the wrong side of history.

0:13:19.679 --> 0:13:21.199
<v Speaker 4>You'll be found wanting.

0:13:21.960 --> 0:13:23.959
<v Speaker 2>I mean, you've highlighted the Chinese market in particular, and

0:13:24.000 --> 0:13:26.160
<v Speaker 2>it's something that you've been involved in for quite some time,

0:13:26.200 --> 0:13:29.080
<v Speaker 2>whether it's investments and partnerships. I think you recently announced

0:13:29.120 --> 0:13:31.959
<v Speaker 2>a four hundred million dollar deal with XMGC. If I

0:13:32.040 --> 0:13:36.400
<v Speaker 2>remember rightly, for many of the clean transport components that

0:13:36.440 --> 0:13:39.240
<v Speaker 2>your mind sights will need that. Over the twenty years

0:13:39.280 --> 0:13:41.400
<v Speaker 2>that Fortescue has been in business, you've been operating here

0:13:41.440 --> 0:13:44.679
<v Speaker 2>in China for all of that time, effectively, can I

0:13:44.679 --> 0:13:47.400
<v Speaker 2>ask you on your views that how have the demands,

0:13:47.400 --> 0:13:51.160
<v Speaker 2>how the needs of Chinese customers changed over that period

0:13:51.280 --> 0:13:55.040
<v Speaker 2>and perhaps more pointedly here in twenty twenty four nearly

0:13:55.080 --> 0:13:58.680
<v Speaker 2>twenty twenty five, is the market ready for the green

0:13:58.720 --> 0:13:59.600
<v Speaker 2>iron revolution?

0:13:59.640 --> 0:14:02.520
<v Speaker 3>That's stick, That is now the time.

0:14:02.920 --> 0:14:07.040
<v Speaker 5>So this is the beauty of free trade amongst nations.

0:14:08.200 --> 0:14:12.040
<v Speaker 5>And if you put barriers around your nation, like big tariffs,

0:14:12.920 --> 0:14:15.880
<v Speaker 5>it's a sugar hit, but in the end of your

0:14:15.920 --> 0:14:21.320
<v Speaker 5>country is going to become best competitive. Example, we purchased

0:14:21.360 --> 0:14:25.680
<v Speaker 5>billions of dollars right now of zero pollution equipment from

0:14:25.760 --> 0:14:29.480
<v Speaker 5>China and Europe white because China and Europe have settings

0:14:29.520 --> 0:14:33.440
<v Speaker 5>for their industries to go green, and so their companies

0:14:33.440 --> 0:14:35.440
<v Speaker 5>are going green and we can buy that equipment.

0:14:36.080 --> 0:14:37.440
<v Speaker 4>One thing which Australia can.

0:14:37.400 --> 0:14:39.760
<v Speaker 5>Lead in because it just so happens to have the

0:14:39.840 --> 0:14:43.520
<v Speaker 5>highest radiance on top of the best huge deposits of

0:14:43.560 --> 0:14:47.240
<v Speaker 5>iron ore, so you've got energy and the molecule together.

0:14:48.920 --> 0:14:53.720
<v Speaker 5>That is a walk up start to make green iron metal.

0:14:54.480 --> 0:14:56.960
<v Speaker 5>We're doing green iron ore, and it'll be done by

0:14:57.440 --> 0:15:01.000
<v Speaker 5>this decade comfortably. But green iron met should also be

0:15:01.080 --> 0:15:05.280
<v Speaker 5>done by this decade company, and that means that we

0:15:05.360 --> 0:15:09.720
<v Speaker 5>can combine that historically high energy which is on.

0:15:09.720 --> 0:15:11.840
<v Speaker 4>Top of these very.

0:15:11.880 --> 0:15:16.520
<v Speaker 5>Very large iron or deposits together make green iron metal.

0:15:17.160 --> 0:15:19.680
<v Speaker 5>That's where ninety eight percent of the pollution which comes

0:15:19.680 --> 0:15:24.280
<v Speaker 5>from steel mills around China, India, wherever you like, comes from,

0:15:24.480 --> 0:15:28.000
<v Speaker 5>is from the conversion of iron ore to iron metal.

0:15:28.920 --> 0:15:31.680
<v Speaker 4>After that, it's just steel. It's like making a cake.

0:15:31.720 --> 0:15:34.320
<v Speaker 5>You put a bit of cobal to lithium or antimony

0:15:34.400 --> 0:15:38.160
<v Speaker 5>or this or that. There's fourteen thousand types of stainless

0:15:38.280 --> 0:15:42.520
<v Speaker 5>and real steel, but it all relies on this ninety

0:15:42.560 --> 0:15:44.400
<v Speaker 5>eight percent, which is very polluting.

0:15:45.160 --> 0:15:47.440
<v Speaker 4>Now, if we can kill that pollution off.

0:15:47.320 --> 0:15:51.440
<v Speaker 5>In Australia ship it to those countries which have huge

0:15:51.440 --> 0:15:56.160
<v Speaker 5>populations where the populations are suffering from that pollution, then

0:15:56.280 --> 0:15:59.320
<v Speaker 5>it's a wind wind for China, it's a wind wind

0:15:59.360 --> 0:16:03.560
<v Speaker 5>for Australia, and it's bringing our technologies and our management

0:16:03.680 --> 0:16:05.680
<v Speaker 5>skills together in partnership.

0:16:06.200 --> 0:16:09.360
<v Speaker 4>It is, I think a union which must happen for

0:16:09.400 --> 0:16:11.040
<v Speaker 4>the good of the world.

0:16:10.520 --> 0:16:14.480
<v Speaker 2>And it represents no small disruption to establish trade dynamics

0:16:14.520 --> 0:16:17.920
<v Speaker 2>that we've built out for decades across the world. But

0:16:18.320 --> 0:16:20.640
<v Speaker 2>to delve into the question of green hydrogen, I mean,

0:16:20.680 --> 0:16:22.880
<v Speaker 2>and you've highlighted that people who doubt that you're getting

0:16:22.880 --> 0:16:25.680
<v Speaker 2>out of the game don't know you. We look at

0:16:25.720 --> 0:16:28.720
<v Speaker 2>green hydrogen quite extensively. In our forecast to net zero,

0:16:28.760 --> 0:16:30.760
<v Speaker 2>we found that the world could be producing and consuming

0:16:30.760 --> 0:16:32.880
<v Speaker 2>about three hundred and fifty million tons of.

0:16:32.840 --> 0:16:35.960
<v Speaker 3>It by the year twenty fifty to stay on that trajectory.

0:16:36.600 --> 0:16:39.240
<v Speaker 2>But that isn't to say that right now the industry

0:16:39.280 --> 0:16:40.720
<v Speaker 2>isn't having its problems.

0:16:40.760 --> 0:16:42.480
<v Speaker 3>And even at Fortescu, a big.

0:16:42.280 --> 0:16:46.200
<v Speaker 2>Proponent, you have pushed out delayed your fifteen million production

0:16:46.280 --> 0:16:48.640
<v Speaker 2>target of renewable hydrogen beyond twenty thirty.

0:16:49.160 --> 0:16:51.840
<v Speaker 3>The question, really, though, is what is the missing.

0:16:51.560 --> 0:16:55.280
<v Speaker 2>Piece of the puzzle right now that's preventing hydrogen scaling

0:16:55.400 --> 0:16:57.360
<v Speaker 2>up in the way that it can that perhaps it

0:16:57.400 --> 0:17:00.000
<v Speaker 2>should in order for us to get these green products

0:17:00.080 --> 0:17:01.960
<v Speaker 2>that the world, as you say, needs.

0:17:02.600 --> 0:17:03.200
<v Speaker 3>What's missing?

0:17:03.320 --> 0:17:03.720
<v Speaker 4>Okay?

0:17:03.800 --> 0:17:10.360
<v Speaker 5>So it's a great question. Often with these global complex riddles,

0:17:11.440 --> 0:17:14.040
<v Speaker 5>the solution is right in front of you and you

0:17:14.200 --> 0:17:17.960
<v Speaker 5>just miss it. I look at the energy around the

0:17:17.960 --> 0:17:20.760
<v Speaker 5>world diesel LNG et cetera.

0:17:21.960 --> 0:17:22.800
<v Speaker 4>They're not pure.

0:17:23.359 --> 0:17:25.800
<v Speaker 5>LNG is ninety five percent methane and the rest is

0:17:25.880 --> 0:17:31.400
<v Speaker 5>rubbish ethane, et cetera. Why do we produce hydrogen where

0:17:31.400 --> 0:17:35.720
<v Speaker 5>it's one hundred only that molecule it's so pure, pure

0:17:35.720 --> 0:17:38.959
<v Speaker 5>in the driven snow. Why do we have this massively

0:17:39.080 --> 0:17:43.040
<v Speaker 5>powerful energy locked up in this glass? And when we

0:17:43.080 --> 0:17:46.439
<v Speaker 5>split the oxygen from the hydrogen, it's pure hydphen We

0:17:46.520 --> 0:17:47.480
<v Speaker 5>just release the oxygen.

0:17:47.840 --> 0:17:51.160
<v Speaker 4>It's expensive when you wind back from that thing. Well,

0:17:51.200 --> 0:17:52.399
<v Speaker 4>does it have to be pure?

0:17:53.359 --> 0:17:57.160
<v Speaker 5>What if the impurity is, say, like pure oxygen, which

0:17:57.200 --> 0:17:59.280
<v Speaker 5>is not difficult because that's where this.

0:17:59.200 --> 0:18:01.080
<v Speaker 4>Comes from, hydron oxygen.

0:18:02.160 --> 0:18:05.199
<v Speaker 5>If you can tolerate that impurity, which is fine for

0:18:05.240 --> 0:18:08.520
<v Speaker 5>the environment when you burn it, then you can make

0:18:08.600 --> 0:18:13.399
<v Speaker 5>hydrogen and a fraction of the cost. And that's what we've

0:18:13.480 --> 0:18:18.760
<v Speaker 5>started to do. And it is hydrogen an oxygen pure

0:18:18.840 --> 0:18:23.000
<v Speaker 5>with those elements, but it's not pure hydrohen you. We

0:18:23.040 --> 0:18:26.480
<v Speaker 5>don't need it to run our turbines, run a run

0:18:26.480 --> 0:18:29.439
<v Speaker 5>our hydrogen turbines. We don't need that. We don't need

0:18:29.480 --> 0:18:31.880
<v Speaker 5>it to make ammonia to run our ships, to run

0:18:31.920 --> 0:18:34.840
<v Speaker 5>our trucks, to run our trains. These are all technologies,

0:18:34.880 --> 0:18:38.080
<v Speaker 5>these in gentlemen, which are replicable around the world, not.

0:18:38.280 --> 0:18:40.600
<v Speaker 4>Just with Fortescue, but everywhere.

0:18:40.880 --> 0:18:44.520
<v Speaker 5>And I'm really excited by the fact that the answer

0:18:44.560 --> 0:18:46.960
<v Speaker 5>was always in front of us, and now we're going

0:18:47.040 --> 0:18:47.879
<v Speaker 5>to hit it.

0:18:47.880 --> 0:18:49.920
<v Speaker 2>It reminds me so much of conversations we were having

0:18:50.080 --> 0:18:52.720
<v Speaker 2>a bit over ten years ago here in China as

0:18:52.720 --> 0:18:55.720
<v Speaker 2>the polysilicon production industry moved from the nine end standard

0:18:55.840 --> 0:18:59.680
<v Speaker 2>for microchips into what became a world leading, world beating

0:18:59.760 --> 0:19:03.240
<v Speaker 2>forduction of silicon four solar panels, And it was that

0:19:03.359 --> 0:19:06.760
<v Speaker 2>conversation of how huge do you need it, how expensive.

0:19:06.280 --> 0:19:08.080
<v Speaker 3>Does it have to be that was sort of holding

0:19:08.080 --> 0:19:08.480
<v Speaker 3>you back.

0:19:09.320 --> 0:19:11.800
<v Speaker 2>I would love to delve into that for hours on

0:19:11.920 --> 0:19:13.480
<v Speaker 2>end with you, to pick your brains for longer, but

0:19:13.560 --> 0:19:16.320
<v Speaker 2>unfortunately we are running out of time. I did have

0:19:16.359 --> 0:19:18.760
<v Speaker 2>one final question for you. A few months ago, you

0:19:18.760 --> 0:19:21.280
<v Speaker 2>sat down with some of my colleagues to talk about

0:19:21.280 --> 0:19:24.040
<v Speaker 2>the ambitions of Fortescue, and you left them with a challenge.

0:19:24.160 --> 0:19:26.679
<v Speaker 2>You said to them, the next person who sits in

0:19:26.680 --> 0:19:29.320
<v Speaker 2>this seat, ask them when are you going to stop

0:19:29.359 --> 0:19:31.800
<v Speaker 2>burning fossil fuels? And you say, say by twenty thirty,

0:19:32.160 --> 0:19:34.560
<v Speaker 2>give them a big hug. Now, I don't know, but

0:19:34.600 --> 0:19:38.040
<v Speaker 2>I think we have rules against hugging guests on stage, but.

0:19:38.040 --> 0:19:40.240
<v Speaker 3>I don't know if that's true for the audience. So

0:19:41.000 --> 0:19:42.600
<v Speaker 3>is that a challenge you'd like to put to the

0:19:42.600 --> 0:19:43.359
<v Speaker 3>audience here today?

0:19:43.480 --> 0:19:46.040
<v Speaker 2>In your discussions, ask the people you meet, when do

0:19:46.080 --> 0:19:48.360
<v Speaker 2>you plan on stop building burning fossil fuels?

0:19:48.400 --> 0:19:51.000
<v Speaker 5>Okay, so thank you. That's a great question. So real

0:19:51.119 --> 0:19:55.840
<v Speaker 5>zero is simply stopping burning foss fuel. Don't worry about

0:19:55.960 --> 0:19:59.960
<v Speaker 5>carbon sigustration, set off offsets, carbon credits, all that rubbit.

0:20:00.640 --> 0:20:01.640
<v Speaker 4>It's all a smoke screen.

0:20:01.720 --> 0:20:05.760
<v Speaker 5>You've got temperatures going through the roof, net zero twenty.

0:20:05.560 --> 0:20:08.760
<v Speaker 4>Fifty there just has too many excuses in it.

0:20:09.040 --> 0:20:11.720
<v Speaker 5>But if you just stop burning fossil fuel, you go

0:20:11.880 --> 0:20:15.600
<v Speaker 5>real zero, then it's economic for your shareholders. I mean,

0:20:16.240 --> 0:20:19.000
<v Speaker 5>Forest US not the highest performing company on Australian stugs

0:20:19.040 --> 0:20:22.280
<v Speaker 5>change history. Because we may make bad economic decisions, we

0:20:22.320 --> 0:20:25.639
<v Speaker 5>make good ones. It's economic to stop burning fossil fuel.

0:20:26.000 --> 0:20:30.439
<v Speaker 5>So I challenge every company in China with this question,

0:20:30.560 --> 0:20:32.520
<v Speaker 5>when are you going to stop burning fossil fuels?

0:20:33.040 --> 0:20:35.000
<v Speaker 4>And the answer will be when I.

0:20:34.920 --> 0:20:38.560
<v Speaker 5>Fall in love with my shareholders, when I fall in

0:20:38.560 --> 0:20:41.720
<v Speaker 5>love with my employees, and I act for them because

0:20:41.800 --> 0:20:45.040
<v Speaker 5>that's when I'll peg a date or stop burning fossil

0:20:45.040 --> 0:20:48.159
<v Speaker 5>fuel by this date. And I say to the entire world,

0:20:48.880 --> 0:20:53.280
<v Speaker 5>real zero, stopping burning fossil fueled by twenty forty is economic.

0:20:53.960 --> 0:20:56.280
<v Speaker 5>It's great for your citizens now, it's great for your

0:20:56.359 --> 0:21:00.879
<v Speaker 5>kids tomorrow, and it will head off global war real sorry,

0:21:00.880 --> 0:21:03.920
<v Speaker 5>by twenty forty. Lightest is the challenge.

0:21:04.920 --> 0:21:08.280
<v Speaker 3>Doctor Forrest, always a pleasure. Please join me in. Thank you,

0:21:08.280 --> 0:21:09.639
<v Speaker 3>Doctor Forest for join us today.

0:21:10.160 --> 0:21:10.520
<v Speaker 4>Thank you.

0:21:19.800 --> 0:21:22.920
<v Speaker 5>Today's episode of Switched On was produced by Cam Gray

0:21:23.119 --> 0:21:26.800
<v Speaker 5>with production assistance from Kamala Shelling. Bloomberg NIF is a

0:21:26.840 --> 0:21:29.840
<v Speaker 5>service provided by Bloomberg Finance LP and its affiliates.

0:21:29.880 --> 0:21:32.600
<v Speaker 1>This recording does not constitute, nor should it be construed,

0:21:32.600 --> 0:21:36.400
<v Speaker 1>as investment in vice, investment recommendations, or a recommendation as

0:21:36.440 --> 0:21:38.080
<v Speaker 1>to an investment or other strategy.

0:21:38.080 --> 0:21:41.480
<v Speaker 5>Bloomberg ENIAF should not be considered as information sufficient upon

0:21:41.560 --> 0:21:44.680
<v Speaker 5>which to base an investment decision. Neither Bloomberg Finance Lp

0:21:44.920 --> 0:21:48.120
<v Speaker 5>nor any of its affiliates makes any representation or warranty

0:21:48.240 --> 0:21:51.359
<v Speaker 5>as to the accuracy or completeness of the information.

0:21:50.920 --> 0:21:52.040
<v Speaker 1>Contained in this recording.

0:21:52.080 --> 0:21:54.679
<v Speaker 5>And any liability as a result of this recording is

0:21:54.720 --> 0:21:55.840
<v Speaker 5>expressly disclaimed.