The Fortescue Metals Group Limited (ASX: FMG) share price jumped well into the green this morning from the market open.
Shares in the iron ore production and exploration company surged 2.89% to hit a high of $24.23 just after the open. However, they have retraced back down to $23.80 at the time of writing, up 1.06% for the day so far.
Let's take a look at the Fortescue share price in a bit more detail.
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What's Fortescue been up to recently?
While there was no market-sensitive information released to explain today's rise in the Fortescue share price, on 6 July the company announced it had delivered on the "ambitious stretch targets" concerning its initial decarbonisation projects.
Fortescue is investigating the possibility of producing "100% renewable green energy", setting decarbonisation targets, and aiming to wipe carbon emissions from its own operations.
A key takeout from the report was that Fortescue has engaged in the "successful production of high purity (>97%) green iron ore" during the initiative.
The testing also examined the use of green waste to make green cement and successfully combusted ammonia in a locomotive fuel. Further testing is underway for the company's haul trucks and ore carriers.
Speaking on the trial's success, Fortescue chief executive Elizabeth Gaines commented:
At Fortescue, we are leading the heavy industry battle against global warming, transitioning from being a major fossil fuel importer to a significant green and renewable energy and product exporter.
Regarding the company's future in decarbonisation, Gaines said:
All of us at Fortescue are committed to its decarbonisation. Our great progress to date and our ongoing projects underpin Fortescue's plan to become a major renewable energy and industry product exporter. As part of this plan, we are aiming to meet or beat our internal global industry-leading target to achieve carbon neutrality by 2030.
Iron ore prices have also been a key driver in the growth of the Fortescue share price over the past year. The iron ore price has skyrocketed from around US$100 per tonne to currently trade at around US$218 per tonne.
Fortescue sits near the top of the iron ore production matrix, being one of the globe's largest producers of iron ore. As such, significant increases in the price of the commodity are great news for the company's bottom line.
Analysts at Macquarie have an outperform rating on Fortescue shares, citing a $27 price target that correlates with iron ore markets running hot. This target implies a 13% potential upside from the current share price.
Fortescue share price snapshot
This year to date, the Fortescue share price has delivered a return of around 1.5%, and over the previous 12 months has posted gains of 62%.
The gains have lagged those of the S&P/ASX 200 Index (ASX: XJO) year to date (11%), but have outpaced its 23% returns over a 12 month period.
At the current market price, Fortescue has a market capitalisation of $73.2 billion and trades at a price-to-earnings ratio (P/E) of 8.4.
