FMG steely move in PNG

Fortescue Metals Group and the Papua New Guinea government have signed a deal to undertake feasibility work for hydropower projects, with electricity exports and steel making potential uses.

Fortescue subsidiary Fortescue Future Industries will work with PNG’s Kumul Consolidated Holdings to investigate feasibility of hydropower projects.

The iron ore mining company told the ASX today the energy could be used for green industry projects, although it was tightlipped.

Papua New Guinea Minister for State Enterprises Sasindran Muthuvel said there was potential to create 25 gigawatts of power or more, and said the Fortescue team had flown over several possible sites.

“(Industrial operations) could include environmentally sustainable production of steel and copper and chemical industries such as fertilizer plants or ammonia plants,” Mr Muthuvel said in a post on social media.

Electricity exports were also possible.

“I will ensure that we actively progress major projects with Fortescue and that this is not just another agreement with intentions that never materialise or just harms PNG’s international reputation,” Mr Muthuvel said. 

“One of my priorities has been to ensure that there is maximum engagement with PNG businesses, ensuring that national content and benefits sharing are just as important as the projects themselves. 

“PNG is open for business and this agreement with (Fortescue chair Andrew Forrest) and Fortescue is a great example.”

Fortescue’s release said projects would be developed by Fortescue Future Industries with ownership and financing secured without recourse to Fortescue.

Fortescue has a range of potential diversification opportunities on its agenda, including hydrogen and gold.