What in the world of the ASX is Fortescue Capital?

What is Fortescue's newly launched business?

| More on:
A woman shrugs and pulls awkward expression with her face.

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 rising again on Friday.

At the time of writing, the iron ore giant's shares are up 0.5% to $25.33.

This means its shares are now up almost 7% in the space of a week. This compares to a 1.2% gain by the ASX 200 index.

Why are Fortescue shares beating the ASX 200?

A strong iron ore price has been one reason, another could be the announcement of a brand new business that is as far away from Pilbara iron ore as it possibly gets.

Yesterday, the company announced the formation of Fortescue Capital, headquartered in New York City.

The company notes that Fortescue Capital is a new green energy investment accelerator platform and an integral next step in its commitment to deliver green energy projects and decarbonisation investments.

It will be led by Robert Tichio as chief executive officer and managing partner. He spent over 17 years at Riverstone Holdings, a New York-based private equity firm, that has seen total capital raised across a variety of private equity and related products exceed US$42 billion.

Fortescue Capital is being developed as a fiduciary for third-party capital. While funding models will differ on a project-by-project basis, it expects to hold equity stakes between 25% and 50% in each project with third-party investors. These potential capital partners include sovereign wealth funds, pension funds, and ultra-high net worth family offices.

Commenting on the formation of Fortescue Capital, Fortescue Energy CEO, Mark Hutchinson, said:

Fortescue is taking its global pipeline of green hydrogen and green ammonia projects to Final Investment Decision, and in doing so has communicated our intention and desire to bring additional equity investors onboard. Further, Fortescue has previously communicated its planned investment to decarbonise its Pilbara operations, and we see Fortescue Capital as an essential tool of engagement as we embark on both missions.

New US manufacturing facility

Finally, in other news, this morning Fortescue revealed that it is expanding its global manufacturing capabilities by investing US$35 million to kickstart a US Advanced Manufacturing Center in Michigan.

The facility has the potential to create up to 600 jobs in its first phase and is expected to become a major hub for Fortescue's production of automotive and heavy industry batteries, hydrogen generators, fast chargers, and electrolysers.

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 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 Scott Phillips.

More on Materials Shares

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Materials Shares

Mineral Resources shares sink on Onslow Iron blow

This miner is having a tough session. Let's find out why.

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Materials Shares

MAC Copper shares in trading halt as miner flags 'potential control transaction'

MAC Copper shares are frozen while Sandfire Resources shares are the fastest risers of the ASX 200 today.

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Materials Shares

Bell Potter says this ASX lithium stock could rise ~50%

The broker has just put a buy rating on this lithium stock.

Read more »

A woman stands next to a large green battery smiling and eating an apple with a lifting green arrow line in the background, indicating rising stock prices.
Share Market News

Are Liontown Resources shares a buy, hold or sell according to Macquarie?

Here’s what the broker has to say about this Lithium miner. 

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Rio Tinto share price tumbles on CEO bombshell news

The mining giant is now looking for a new leader.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

What's going on with the Fortescue share price today?

This mining giant is making changes to its leadership.

Read more »

Happy construction worker at a building site with a group of workers at the background.
Materials Shares

After its result, does Macquarie rate James Hardie shares a buy, hold or sell?

The company announced its FY25 earnings on Wednesday.

Read more »

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

Fortescue shares fall on Iron Bridge blow

Iron Bridge is taking longer to ramp up than planned.

Read more »