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