The Fortescue Ltd (ASX: FMG) share price is currently down 2%. What’s going on for the resources giant?
Fortescue is one of the world’s biggest iron ore miners, it produces many millions of tonnes of iron each year. Any disruption to that can impact short-term earnings.
Fortescue’s train derailment
It was recently reported by the ABC that multiple ore cars had been derailed over the weekend.
The incident reportedly happened around 150km south of Port Hedland in the Western Australia region of Pilbara.
The ABC said Fortescue “declined to be interviewed” but said in a statement:
No one was injured in the incident and there is no impact to members of the community.
Iron ore exports for December were reportedly not impacted, though the spokesperson “declined to respond to questions about any impacts on January shipments.” This may have an impact on Fortescue shares if it’s a material hit.
Rail operations were expected to resume today.
EU funding for green ammonia
In the middle of ecember, Fortescue announced it had been awarded €200million in European Union funding for its Norway green ammonia project. This refers to the Holmaneset Project.
The planned green ammonia plant, west of Svelgen, aims to capitalise on the surplus renewable energy from the Norwegian transmission grid and ship the resulting green ammonia to domestic and European markets.
Fortescue is currently targeting construction to commence in 2025, with operations starting in 2027, pending final approvals from the board.
Fortescue Norway Country Manager, Thor Magnus Rovik, said:
The Holmaneset Project is integral to creating a new green economy for Norway and Europe at scale. The green hydrogen and green ammonia produced near Svelgen has the potential to replace fossil fuels in industries that find it difficult to cut emissions, like long-haul transport, shipping and heavy industry.
This project will be important for Norway to achieve its ambitious targets to cut emissions and build sustainabl industrial development, and those targets are crucial for overall emissions reductions across Europe.
Final thoughts on Fortescue shares
It’s disappointing that the train derailment happened, but it’s also one of those things that can go wrong for a miner. As long as no-one was hurt, and it’s a quick fix, then it shouldn’t be too much of an issue for the company.
The iron ore price has soared in the last several weeks, so Fortescue is raking in a lot more profit than it was before. I wouldn’t call this the right time to invest though, because there could be a time when the iron price falls again.
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