Why the Fortescue (ASX:FMG) share price is slipping today

The Fortescue share price has dipped today amid news the company met Jordanian officials to discuss hydrogen energy.

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The Fortescue Metals Group Limited (ASX: FMG) share price is falling slightly today amid news that the company met with Jordanian government officials to discuss hydrogen energy, with few other details revealed.

The Fortescue share price is down 0.54% to $20.25 today.

Fortescue is one of Australia’s largest miners, involved primarily in the exploration, development, production, processing and sale of iron ore. Unlike Australia’s other large mining companies, however, it has a net-zero emissions target by 2030.

Fortescue’s hydrogen shift 

In recent years, Fortescue chair Andrew Forrest has been one of Australia’s most vocal proponents of shifting towards renewable energy. The company recently announced plans to become carbon neutral by 2030.

Fortescue is planning to shift towards producing hydrogen energy and ammonia, which was the stated purpose of its meeting with Jordanian officials.

It’s been a busy few months in this space for the Australian mining giant. Fortescue recently signed an agreement with South Korean steel manufacturer Posco to collaborate on a hydrogen-production partnership.

It signed similar deals with South Korea’s Hyundai and the Commonwealth Scientific and Industrial Research Organization last year.

Fortescue, hydrogen and the Middle East

A delegation from Fortescue met with Jordanian Planning Minister Nasser Shraideh to explore and discuss investment opportunities. Forrest has recently returned from a world tour scouting potential hydrogen-producing destinations.

Shraideh reportedly gave a presentation on Jordan’s investment environment and spoke of the government’s clean energy plans, suggesting the Middle Eastern country is keen on attracting Fortescue’s investment. Australia’s Jordanian ambassador also attended the meeting.

The Middle East appears to be emerging as the go-to destination for hydrogen energy producers, with the world’s largest hydrogen plant recently opened in Saudi Arabia.

The plant is being opened near the Jordanian border in Neom, a planned new mega-city built around the burgeoning renewable energy industry.

Neom, in many ways, is targeted to be the new centre of world hydrogen production, and the Jordanian government may be keen to profit and replicate from the emerging industries on their doorstep.

But Jordan is already developing a highly effective renewable energy industry of its own. Jordan is scheduled to raise renewable electricity production to 2,400 megawatts this year, accounting for approximately 22% of the country’s total requirements.

Fortescue share price snapshot

The Fortescue share price has fallen 18% since the beginning of 2021. Despite these losses, it’s still up more than 74% over the past 12 months, largely due to high iron-ore prices.

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Motley Fool contributor Lucas Radbourne-Pugh 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.

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