Mining tycoon Andrew Forrest ups stake in Fortescue

Andrew Forrest founded Fortescue Metals Group in 2003. (Image from: Daily Telegraph video)

Mining billionaire and philanthropist Andrew Forrest has swooped down on more than 22 million shares in the company he founded, Fortescue Metals Group (ASX: FMG), the world’s fourth largest iron ore miner.

Forrest, who paid A$242.9 million ($160.2 million) for the shares, now has a 35.3% stake in the company, which last week reported its profit had more than tripled in the six months to December, exceeding market expectations. 

Forrest bought 22.1 million shares on top of the 1.09 billion he already owned, which represented a 35.3% stake

The mining magnate said his decision was partly driven by Fortescue’s commitment to community and environmental responsibility, which comes amid growing investor and public pressure for miners to lower emissions.

“The company believes carbon neutrality must be achieved as soon as possible and is investing in practical initiatives that reduce or eliminate emissions, like solar and hydrogen energy, that are and will make a real difference to carbon reduction,” he said in a statement on Friday.

Forrest highlighted the company’s efforts to move away from diesel for power generation. Unlike BHP, however, Fortescue has refused to set a target to reduce so-called “Scope 3” emissions — those produced when customers burn or process a company’s raw materials.

The world’s major iron ore producers are responsible for some of the largest volumes of end-use emissions globally, equivalent to those of the very biggest independent oil companies.

Producing a tonne of steel from iron ore releases almost as much carbon as burning a tonne of coal for energy. Globally, the steel industry accounts for about 2.8 billion tonnes of annual emissions, compared to 10.1 billion tonnes for thermal coal