Fortescue Metals Group Limited (ASX:FMG) shares are under pressure on Monday after iron ore price weakness offset an announcement…
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The Fortescue Metals Group Limited (ASX: FMG) share price is sinking on Monday morning.
At the time of writing, the iron ore producer’s shares are down 4% to $20.40.
Why is the Fortescue share price sinking today?
Investors have been selling Fortescue shares this morning after a decline in the spot iron ore price offset a positive announcement.
According to CommSec, the benchmark iron ore price fell by US$5.35 a tonne or 3.1% to US$165.70 a tonne on Friday night. This meant that over the week, the iron ore price fell by a total of US$8.95 or 5.1%.
The steel-making ingredient came under pressure last week when Chinese authorities curbed steel production in order to tackle rising pollution levels.
What did Fortescue announce?
The weakness in the iron ore price has ultimately offset an announcement by Fortescue revealing its plans to be carbon neutral by 2030. This is 10 years earlier than initially planned.
Fortescue’s Chairman, Dr Andrew Forrest, commented: “We have joined the global battle to defeat climate change. We are trialling and demonstrating green hydrogen technologies in global-scale commercial environments, while also rapidly evolving into a green hydrogen and electricity producer of similar scale.”
“Our commitment to demonstrate green hydrogen’s economic value in world-scale operations, and become a major energy exporter, while implementing the considerable facilities to support both, means that Fortescue has emerged not simply as a thought-leader and investor, but uniquely as an executor of major green hydrogen projects.”
How will Fortescue achieve this?
Dr Forrest revealed that the company is aiming to provide the missing links in the battle against climate change.
He explained: “Our aim is to provide the two “missing links” in the climate change battle, to create both the demand and the supply of green hydrogen. Due to its high energy performance and environmental neutrality, green hydrogen and direct green electricity has the potential to eliminate fossil fuels from supply chains. Once established, these advances will also substantially reduce Fortescue’s operating costs.”
Fortescue’s strong focus on green energy and our carbon neutrality targets will sit alongside our continuing excellence in, and commitment to, our iron ore business. While our green energy and industry initiatives may one day significantly outscale our iron ore business due to the global demand for renewable energy, our commitment to iron ore and resources globally remains indefeasible,” Dr Forrest concluded.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.