Cost per tonne and project return
Electrification cuts Fortescue’s cost of iron ore by A$6.20 a tonne before capital, A$0.40 after it.
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The project is Fortescue’s Pilbara green grid (solar, wind, batteries and transmission), the chargers and in-mine power lines, and an electric mobile fleet in place of diesel, gas and bought-in power.
- Before capital: the annual benefit at full run rate, A$1,245m, divided by the 201.3 Mt Fortescue shipped in FY26.
- After capital: the project’s net present value at an 8% real pre-tax WACC, spread over every tonne shipped from FY27 to FY55.
- IRR: real, pre-tax, unlevered, FY24–FY55, with the fuel tax credit. 9.0% on ITK’s capital estimate of A$11.7bn; 12.6% if all capital is scaled to Fortescue’s stated US$6.2bn programme.
Diesel is A$2.50/L delivered, A$1.96/L after the fuel tax credit. Shipments are held flat at the FY26 level.
Sources: Fortescue FY26 annual report, results call and June 2026 quarterly; Clean Energy Regulator; CSIRO GenCost 2025-26; ITK estimates.