Fortescue is considering jump-starting its lithium ambitions with an acquisition.
Up until now, Fortescue has been focused on digging iron ore out of the ground
The ASX 200 miner is looking to expand into lithium to help its Fortescue Future Industries with its green initiatives
It’s making good progress with its African Belinga project
The S&P/ASX 200 Index (ASX: XJO) miner Fortescue Metals Group Ltd (ASX: FMG) has said that it’s on the hunt for lithium opportunities.
It’s best known for being an ASX iron ore share, and the company is also expanding into green energy through green hydrogen and green ammonia.
The company has also been looking to expand into other materials, namely resources focused on decarbonisation such as lithium. Fortescue’s leader, Dr Andrew Forrest, has said that it would be ideal if the mining business could supply some of the green commodities that Fortescue Future Industries (FFI) is looking to use.
Could Fortescue make a lithium acquisition?
Accoding to reporting by the Australian Financial Review, Fortescue has been looking for lithium in Western Australia and South America over the last seven years, while avoiding making acquisitions.
Discussing the possibility of a lithium acquisition, the boss of the ASX 200 mining share’s iron division, Fiona Hick, said:
That’s always part of our thinking because there are different ways to grow. One is through the drill bit and one is through acquisition, but it’s got to be at the right price.
We’re being pretty disciplined in not just looking at or making acquisitions for the sake of it. We really need to make sure that they stack up financially.
At the end of the day, we’re here to be a successful business. Keeping a strong focus on things we can control is where I’ll be placing my focus because we want to ensure the continued success of the business in whatever future scenarios we might face.
According to reporting by the AFR, Fortescue has exploration tenements in South Amrica and a team looking at “critical minerals” in Brazil, Chile and Argentina.
Fortescue is currently working out what exposure to which minerals it actually needs to deliver on Fortescue’s overall green goals.
African iron ore looking promising
In the AFR article, Hick also talked briefly about the ASX iron ore share’s efforts to expand into producing iron ore in Africa with the Belinga iron ore project.
The iron ore boss said that the Gabon project is “progressing well”. She said:
Every indication we have through geological mapping and the samples that we’ve taken indicate that it’s really high-grade and large scale.
The drilling program will occur over time to prove that out, but initial indications
are that it could be similar in scale and size to Simandou in Guinea.
Fortescue has said that it’s a high-grade deposit, and it’s one of the world’s largest undeveloped high-grade hematite deposits. It has also said that there are “geological similarities to the Simandou depoit”, which is a large iron ore project in Africa that Rio Tinto Ltd (ASX: RIO) is involved with, along with partners.
ASX 200 miner valuation snapshot
The Fortescue share price is down 0.05% year to date.
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