Fortescue Metals Group Limited (ASX: FMG) shares saw plenty of volatility during 2022. But, unlike many ASX growth shares, the ASX mining share managed to finish the year higher. It rose by 3.3%.
This means that the iron ore ASX share managed to beat the return of the S&P/ASX 200 Index (ASX: XJO). The index fell by 7.25% over 2022.
Plus, don't forget that Fortescue paid a very large dividend in 2022. The business paid an FY22 dividend per share of $2.07. Excluding franking credits, the Fortescue dividend amounted to an additional 10.8% return.
While the changes in the iron ore price may have had the biggest short-term impact on the Fortescue share price, the last price change is quickly forgotten as the next day of trading occurs.
Here are three of the most significant announcements during the year.
Decarbonisation plan announced
The business revealed its US$6.2 billion plan to eliminate fossil fuel use within the business and achieve 'real' zero terrestrial emissions (scope 1 and 2) across its iron ore operations. The investment will "eliminate Fortescue's fossil fuel risk profile and enable it to supply customers with a carbon free product."
Fortescue said that it expects to generate attractive economic returns from its investment arising from the operating cost savings due to cutting out diesel, natural gas and carbon offset purchases from its supply chain.
The ASX mining share, by 2030, will avoid 3 million tonnes of CO2 emissions per year, with net operating costs savings of US$818 million per year, at the prevailing market prices of diesel, gas and Australian carbon credit units.
Fortescue believes this will lead to a significant new green growth opportunity by producing a carbon-free iron ore product and through the commercialisation of decarbonisation technologies. This could be a useful boost for Fortescue shares.
This will involve zero emission trucks, zero emission trains and zero emission drill rigs and excavators. Within the overall expenditure, it will spend billions on renewable energy, battery storage and infrastructure.
E.ON
At the end of March 2022, Fortescue revealed its biggest potential green hydrogen partnership. As a reminder, Fortescue is looking to create a global portfolio of locations that produce green hydrogen through Fortescue Future Industries (FFI) as a fuel source to replace fossil fuels in heavy machinery, boats and planes.
E.ON, is one of Europe's largest operators of energy networks and energy infrastructure, and a provider of innovative customer solutions for 50 million customers.
Fortescue revealed that it's aiming to deliver "up to five million tonnes per annum" of green hydrogen to Europe by 2030. The two businesses signed a memorandum of understanding, with binding elements between the parties.
This deal could represent a third of FFI's green hydrogen production by 2030. It could be generating meaningful earnings for the company, and potentially boost the Fortescue share price.
WAE acquisition
In January 2022, which seems like a very long time ago, Fortescue announced a sizeable acquisition. It bought Williams Advanced Engineering (WAE) for £164 million.
Fortescue has been working with WAE since early 2021 to design and build a prototype battery system to power an electric mining haul truck.
The deal provided Fortescue with "critical technology and expertise in high-performance battery systems and electrification".
In the 2021 calendar year, WAE generated revenue of around US$84 million, with customers in sectors such as premium automotive and motorsport.
Fortescue wants WAE to become a major player in the growing global market for heavy mobile equipment and rail.
If this goes well, it could be a boost for Fortescue shares.
