Shares of the ASX-listed Fortescue Metals Group Limited (AU:FMG) gained nearly 5% today after the company announced its expanded partnership with equipment manufacturer Liebherr to develop green mining solutions. The collaboration seeks to establish one of the largest zero-emission mining fleets globally, representing a major step in reducing the dependence on fossil fuels.
Fortescue is an Australian mining company focused on iron ore and green energy. Meanwhile, Liebherr is a German-Swiss equipment manufacturing company with global operations.
Fortescue Teams Up with Liebherr
The new partnership between Fortescue and Liebherr expands their existing alliance, formed in June 2022, to jointly develop zero-emission mining equipment. Under the new terms, Fortescue has raised the total number of machines supplied by Liebherr to around 475 zero-emission machines from 120 haul trucks. It includes around 360 autonomous battery electric trucks, 55 electric excavators, and 60 battery-powered dozers.
The equipment will utilize the battery power system developed by Fortescue Zero. Additionally, Liebherr and Fortescue will implement an autonomous battery electric haulage solution for big mining operations. The delivery of the equipment is in multiple phases, which began in October 2023 and is expected to be completed by 2030.
Meanwhile, the equipment accounts for about two-thirds of Fortescue’s current mining fleet. As a result, this partnership marks significant progress in transitioning Fortescue’s diesel mining fleet to a zero-emission fleet. This is in line with the company’s goal to achieve real zero Scope 1 and 2 emissions in its Australian iron ore operations by 2030. In FY24, the mining fleet consumed around 450 million liters of diesel, contributing to 51% of its Scope 1 emissions.
Is Fortescue a Good Share to Buy?
Regarding share price growth, analysts have rated FMG stock as Hold. According to TipRanks, the stock has received five Hold, four Sell, and three Buy recommendations. The average Fortescue share price target is AU$18.85, which is similar to the current trading levels.
