The Fortescue Metals Group Limited (ASX: FMG) share price is pushing higher on Wednesday.
In morning trade, the mining giant's shares are up 2% to $17.59.
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Why is the Fortescue share price rising?
Investors have been bidding the Fortescue share price higher today for a couple of reasons.
The first is another very positive day of trade on the ASX 200 index following a strong night on Wall Street.
This has seen fellow mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) push higher this morning as well, helping take the ASX 200 index 1.4% higher.
What else?
Also potentially giving the Fortescue share price a lift today was the release of an announcement relating to its Fortescue Future Industries (FFI) business.
According to the release, FFI has entered into a global strategic collaboration with energy infrastructure developer Tree Energy Solutions (TES). This collaboration aims to accelerate the development of a world leading green hydrogen and green energy import facility in Germany.
As part of the agreement, Fortescue will make a 130 million euros (US$127 million) investment. From this, 100 million euros (US$98 million) will be used for the construction of the TES terminal in Wilhelmshaven, Germany.
FFI will also gain a shareholding in TES and a 30% stake in TES subsidiary Deutsche Grüngas und Energieversorgung. The latter is the project company that will build the TES Green Energy Hub in Wilhelmshaven.
Fortescue's executive chairman, Dr Andrew Forrest AO, said:
The United Kingdom and Europe urgently need green solutions to replace fossil fuels and this investment will enable Europe to do exactly that. Not in 2050, but in four years from now.
From the beginning of FFI, our philosophy was to drive performance across the entire new renewable GH2 value chain while delivering returns to our shareholders. This investment reinforces this commitment and is a significant step forward in FFI's journey to become one of the world's largest green energy producers.
Where is the money coming from?
This investment will be funded by FFI's unutilised capital commitment of US$1.1 billion.
However, to reflect this investment, the guidance for FFI's anticipated capital expenditure in FY 2023 has been revised higher to US$230 million from US$100 million. The guidance for FFI's anticipated operating expenditure of US$500 – US$600 million is unchanged.
