What is Fortescue Metals Group doing in Papua New Guinea?

Welcome,

Earlier this month, Papua New Guinea’s government announced a deed of agreement with Australian iron ore giant, Fortescue Metals Group, to develop renewable energy projects in PNG. Business Advantage PNG learns more about its plans from Julie Shuttleworth, CEO of subsidiary Fortescue Future Industries.

Fortescue Future Industries’ Julie Shuttleworth.

A deed of agreement between PNG and Fortescue Future Industries (FFI) was announced earlier this month, which will see the Fortescue Metals Group subsidiary explore more renewable energy projects in Papua New Guinea.

In its announcement of the latest deed of agreement on 10 August, the government has said FFI will be looking into ‘hydro, solar, wind and geothermal power’, with sites in Gulf and West New Britain provinces being investigated.

It follows a similar agreement FFI signed with the government and Kumul Consolidated Holdings back in September 2020 to explore hydropower projects.

‘This [second agreement] builds on our hydropower studies already underway,’ explains FFI’s Julie Shuttleworth, responding to questions from Business Advantage PNG.

‘We believe PNG can be at the forefront of developing hydropower and geothermal resources for the emerging global green hydrogen industry.’

‘These deeds enable FFI to investigate the feasibility of potential projects for the development of PNG’s hydropower and geothermal resources to support green industrial operations, largely for export to global markets, as well as for domestic consumption.

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‘FFI has identified locations within PNG for study and assessment for hydropower plants and geothermal power facilities.’

Why PNG?

Last October, FFI appointed a PNG Country Manager, former InterOil and Total E&P executive Andy Hetra. He now heads an office in Port Moresby with a team of project and legal specialists. Their focus is on progressing various studies and engaging with local communities.

In February this year, FFI also brought former Australian High Commissioner to PNG, Nick Warner, onto its board (along with former Australian Prime Minister Malcolm Turnbull). Warner is also well known in the Pacific for his subsequent role as the Special Coordinator of the Regional Assistance Mission to the Solomon Islands.

So why is FFI targeting PNG, a country with which it has little previous history?

‘Our approach is that the local communities where we operate will benefit from growth and development.’

‘There is strong potential for green industry development in PNG,’ says Shuttleworth. ‘We believe PNG can be at the forefront of developing hydropower and geothermal resources for the emerging global green hydrogen industry.

‘We are excited to be working with the PNG Government to develop these important opportunities for the future prosperity of PNG and a world that needs to decarbonise.’

It is worth noting that PNG is not the only country FFI is looking at for projects. Last month, it signed a deal to develop green hydrogen projects in India.

Early days

It is still early days for FFI’s operations in PNG, with work only just beginning on acquiring the relevant licences. We don’t know what projects are likely to be first, nor their size, nature or scope. Nor do we know where finance will be coming from, nor what other parties may become involved.

State Enterprises Minister William Duma said a timeframe of ‘no more than three years’ was being looked at before the first project could be operated.

While project details are understandably scant at this stage, Shuttleworth outlines how FFI will operate in PNG.

‘FFI is firmly committed to working closely with the people of PNG and local communities; and we embrace the diverse cultural, social and environmental values of PNG’s she says.

‘Our approach is that the local communities where we operate will benefit from growth and development. This includes providing training, employment and business development opportunities for local people in support of construction and operational activities.’

Comments

  1. Francis Nazia says

    A good company in terms of building relationships with the indigenous people.

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