FSUMF - Fortescue plans spending $6.2B to decarbonize iron ore operations by 2030

Fortescue Metals ( OTCQX:FSUMF ) unveiled a $6.2B plan Tuesday to eliminate the use of fossil fuels and achieve "real zero terrestrial emissions" across its iron ore operations by 2030.

The plan includes $3.2B to construct an additional 2-3 GW of renewable energy generation and battery storage, as well as a green mining fleet of trucks and trains at its projects in Western Australia's Pilbara region; most of the investment will be made during 2024-28.

The world's fourth-largest iron ore producer said it expects to save $818M/year from 2030 based on current prices of diesel, gas and carbon credits.

Fortescue's ( OTCQX:FSUMF ) plan would "save some $4/ton in operating costs" and "add $0.50 at least to shares through simply eradicating fossil fuels," CEO Andrew Forrest said in a conference call with media.

The plan is more ambitious than those of larger rivals Rio Tinto ( RIO ) and BHP ( BHP ); Rio has said it wants to reduce its operational emissions by 50% by 2030, while BHP is aiming for a 30% cut, with both targeting net zero by 2050.

As with Rio and BHP's targets, Fortescue's ( OTCQX:FSUMF ) 2030 emissions targets apply only to its Scope 1 and 2 emissions, from direct energy and electricity use, and not Scope 3 emissions, which include those released by customers during the steelmaking process; Fortescue says it will reach net zero Scope 3 emissions by 2040.

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