What's going on with Fortescue and this green hydrogen unicorn?

Why did Fortescue just lead an investment round in this green unicorn?

| More on:
A man with a unicorn mask sits at desk and cheers.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fortescue Metals Group Ltd (ASX: FMG) shares are avoiding the market weakness today and are trading flat.

This outperformance may have been driven by the release of an announcement today.

What did Fortescue announce?

This morning Fortescue announced that it has taken the lead investor role in Electric Hydrogen's US$380 million Series C funding round.

This latest funding round means that Electric Hydrogen has now raised over US$600 million since it was founded in 2020. Fortescue is in good company, with the likes of Amazon (NASDAQ: AMZN) and Honeywell International (NASDAQ: HON) taking part in previous funding rounds.

According to Reuters, sources say that this latest funding round values Electric Hydrogen at US$1 billion, making it a green unicorn.

What is Electric Hydrogen?

Electric Hydrogen claims to manufacture and commission the world's most powerful electrolysers for critical industries to produce the lowest-cost green hydrogen.

Green hydrogen is seen as many as the key to decarbonising the industrial world. However, high electrolyser costs have been a stumbling block for users. Until now.

Electric Hydrogen's complete 100MW electrolyser systems produce green hydrogen from renewable electricity and water at a large scale. Each electrolyser system can make nearly 50 tons of green hydrogen per day at a transformational low cost.

Commenting on the news, Fortescue Energy's CEO, Mark Hutchinson, said:

Fortescue is committed and focused on supporting the rapid scaling of green technology to help heavy industry decarbonize and producing green hydrogen at scale is integral to that. Right now there are not enough electrolysers in the world to support the amount of green hydrogen we are set to produce. That is why we are partnering with other world leaders in this space to secure our green energy supply chain, and we're excited to invest and secure capacity with Electric Hydrogen to help us achieve our goals.

In addition to this investment, Fortescue and Electric Hydrogen have signed a framework procurement agreement. The latter will supply 1 gigawatt of electrolyser systems to Fortescue's green hydrogen projects in the US and globally.

Electric Hydrogen's CEO and co-founder, Raffi Garabedian, adds:

Electric Hydrogen and Fortescue share an ambition to achieve large scale, low-cost production of green hydrogen globally as soon as possible.  We want to make fossil-free hydrogen an economic inevitability for fertilizer producers, steelmakers, chemical companies and other critical industries that have no other option to decarbonize.

Should you invest $1,000 in Fortescue Metals Group right now?

Before you buy Fortescue Metals Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Fortescue Metals Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com. The Motley Fool Australia has recommended Amazon.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Miner holding cash which represents dividends.
Dividend Investing

Here's the BHP dividend forecast through to 2029

Is the Big Australian's dividend heading higher or lower from here? Let's find out.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Down 36% in a year, why this ASX 200 lithium share is at 'risk of further downside'

A leading expert says this slumping ASX 200 lithium stock still faces headwinds. But why?

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Materials Shares

Is now the perfect time to buy Rio Tinto shares?

Does Goldman Sachs expect some big returns from this mining giant's shares?

Read more »

a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.
Materials Shares

Down 25% in a week: Should you buy Mineral Resources shares?

Bell Potter has given its verdict on this beaten down mining and mining services company.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Earnings Results

IGO share price crashes 7% on 'significant challenges' and $782m loss

This mining share has had a very difficult time so far in FY 2025.

Read more »

A man looking at his laptop and thinking.
Earnings Results

Pilbara Minerals share price pushes higher despite $69m half-year loss

Let's see how this lithium miner performed during the first half.

Read more »

A mining worker wearing a white hardhat and a high vis vest stands on a platform overlooking a huge mine, thinking about what comes next.
Earnings Results

Rio Tinto share price falls on mixed FY24 result and dividend cut

This mining giant's copper operations were on fire in FY 2024. But not enough for dividend growth.

Read more »

a woman smiles as she checks her phone in one hand with a takeaway coffee in the other as she charges her electric vehicle at a charging station.
Materials Shares

The ASX 300 lithium stock to buy now following a 'major de-risking event'

A leading investing expert believes this ASX lithium producer is trading at a discount.

Read more »