Move faster and smarter or ‘miss the boat’: Otranto tells IMARC
- 29 October 2024
Australia must double down fast on green mining and metals or it will “miss the boat” as the world, including China, transitions away from fossil fuels and possibly the current generation of giant iron ore mines, Fortescue CEO Dino Otranto has warned.
Otranto told the IMARC 2024 conference in Sydney massive strategic investment to deliver economies of scale in green power generation in the country’s industrial centres – including the Pilbara iron ore industry – was critical to their long-term survival. Competitive speed and scale required cooperation between industry and governments.
“It all comes down to the cost of electricity,” he said.
“We must solve that problem.
“We’ve had it good for a long period of time. We haven’t really needed to change the way we do business. But necessity drives creativity.
“Let’s get us all around the table and say … What is the actual problem we’re trying to solve for? And if we can unite on the cost of electricity, which I think is a pretty uniting factor, why not solve it? We’ve got some of the best minds. We’ve got capital.
“The beauty is that we have on our doorstep manufacturing opportunities which allow Australia to compete internationally, and when you have that cost of electricity low, combined with the abundant resources we have, the geography position that we have, I think it's a recipe that we cannot let slip by.
“And that’s the message: it will slip by.
“China, the US, the rest of the world, is not going to wait for Australia to work this stuff out.
“Is it difficult? Absolutely, it is difficult. But we have got to do it.
“Industry and government in strategic partnerships … is going to be the key. But it does need industrial and political leadership to get going.”
Otranto said higher levels of industry collaboration he’d seen working in other countries were emerging in Australia.
“But I do think it needs to take another big step forward. Actually commit together ... before the lawyers get involved.”
Otranto, previously chief operating officer at Vale Base Metals where he led its copper and nickel businesses, said China “came out of nowhere and built the biggest nickel industry the world has ever seen, and disrupted and took out an entire market sector in four years”.
“To see that happen and then, coming back home thinking, wow, this almost seems like déjà vu.
“You just have to watch what’s happening. The investment in Saudi Arabia [in] green iron and a green steel industry [not using Australian iron ores]. Simandou [in Guinea] is coming online. That’s a high-grade deposit going straight into the steel mills in China.
“We were given that [nickel] opportunity as well, by the way, and we probably thought, it’s never going to happen. You’ll never get somebody that will have a technology disruption like RKEF [rotary kiln-electric furnace production of ferronickel] and HPAL [high-pressure acid leach] and nickel now.
“They’ve [China] conquered it. They’re doing it.
“Let’s not sit here with our head in the sand thinking it’s not going to happen again.
“We cannot miss the boat again.
“Those parallels between downstream processing and energy ... That is where, if we can make that marriage happen, finally the economics [improve] and the scale becomes so enormous that we push ourselves back into that market.
“And we have a chance.
“I’m an optimist. We have a huge opportunity. That’s why we [Otranto and family] came home. I joined a great organisation. Our founder sees the world the same way.”
Otranto said Fortescue was building the Pilbara’s first green iron plant to “prove to the world it can be possible”.
“It’s essentially taking iron ore, reducing it with hydrogen, making a 95% metal,” he said.
“It’ll be 2000 tonnes per annum. It’s not huge, but it’s not lab-scale.
“We’re covering the entire cost of that to demonstrate the technology is possible, because that’s been out there for a long time – that you can’t do it with Pilbara-based iron ores.
“Well, even if you can’t do it now you’re going to have to do it because the steel industry accounts for a significant proportion of carbon emissions on the planet and currently the route is through coal.
“You have to be able to do it through hydrogen. There are no other chemical ways to do it: you have to be able to reduce it without coal.
“We’re going to show that it can be possible. And in parallel we’re advocating for a much, much bigger plant, and again, that is to lean on partnerships with other organisations, energy providers, and certainly governments and First Nations groups in the areas that we operate.
“Because that’s a significant part of the equation here … to demonstrate that Pilbara based iron ores can be competitive into the future.”
