Why Fortescue Invested in XCMG’s Sustainable Equipment
Battery electric loaders, dozers, water carts and graders are on their way to boost Fortescue’s iron ore operations in Pilbara, Australia starting in 2026.
Chinese heavy machinery firm XCMG signed an agreement with Fortescue in November 2024 to deliver this zero-emission machinery.
Fortescue's Chairman, Dr Andrew Forrest, and CEO of Metals and Operations, Dino Otranto, have already been to Xuzhou to observe the initial machines being assembled.
“We’re moving rapidly to decarbonise our Pilbara iron ore operations and eliminate our Scope 1 and 2 terrestrial emissions by 2030,” Dino said when the deal was announced.
“To achieve this target, we will need to swap out hundreds of pieces of diesel mining equipment at the end of their life with zero emissions alternatives.
“We’re thrilled to partner with XCMG to supply and support cutting-edge battery electric mining equipment, marking another significant step forward in our decarbonisation journey.
“As the global mining industry continues to evolve, we’re proud to be at the forefront of driving innovation in value adding green technology and showing the world that industry can decarbonise.”
Fortescue’s sustainability efforts
“Sustainability has been at the heart of Fortescue since we were founded in 2003,” the company’s website says.
The company says its Real Zero strategy goes beyond net zero to achieve zero emissions without the use of carbon credits or offsets.
Starting from 2023, Fortescue’s transition plan says that it no longer purchases voluntary carbon offsets for Scope 1 and 2 emissions, with a target to realise zero emissions by 2030.
The battery electric vehicles provided by CXMG are part of this strategy, alongside a US$2.8bn partnership with Liebherr for 475 zero emission machines.
Fortescue aims to become an integrated green technology energy and metals company, including hydrogen systems as part of its transformation plan.
Almost all of the company's Scope 3 emissions originate from steel production, an industry heavily reliant on fossil fuels like coal.
The iron ore to steel conversion process demands high energy levels and temperatures.
To tackle this, Fortescue’s transition plan says that the company plans to explore technologies to improve the emissions intensity of this process and demonstrate green metal feasibility through its Green Metal Project in the Pilbara region.
About XCMG
XCMG, or Xuzhou Construction Machinery Group, is a notable heavy machinery manufacturer established in 1943.
Its products reach more than 280 countries globally.
XCMG’s 2024 Sustainability Report shows that it reduced its water consumption by more than 375,000 tonnes and used 13.63% clean energy.
It also launched 21 new energy product lines in 2024 including electric excavators, hydrogen powered mining trucks and hybrid cranes.
XCMG’s deal with Fortescue, expected to be worth more than US$400m, is set to eliminate millions of litres of fossil fuels from the business’ iron ore operations.
Yang Dongsheng, Chairman at XCMG, said: “XCMG is dedicated to long-termism and sustainable development, offering high-end, intelligent and green ‘product + scenario’ full life cycle solutions to global customers.
“The company has achieved green electrification across its entire product range, with new energy products accounting for 18% of revenue, leading the industry's green and low-carbon transformation.
“XCMG and Fortescue have formed a long-term partnership based on ‘value resonance, cultural resonance and win-win cooperation’. This collaboration will significantly contribute to global environmental protection and the development of a green, sustainable economy.”
