Is this the beginning of a beautiful green hydrogen friendship between Fortescue and Rio Tinto?

The Fortescue Metals Group Limited (ASX: FMG) share price is up 3% and the Rio Tinto Limited (ASX: RIO) share price is up 2.6% amid intriguing news of a possible link-up between the two about green hydrogen.

For readers that don’t know, Fortescue is increasingly focused on being a major green energy producer through its Fortescue Future Industries (FFI) division.

FFI wants to build a portfolio of green hydrogen production facilities around the world. It has a goal of making 15mt of green hydrogen per annum by 2030, with a further increase in the subsequent years.

Rio Tinto’s chief scientist Nigel Steward recently had a number of things to say about green hydrogen, according to reporting by the Australian Financial Review.

Steward said that hydrogen was still “prohibitively expensive” and required a “technology breakthrough” to get the cost down. He suggested that green hydrogen couldn’t be transported without hurting the environment, so Rio Tinto would only produce hydrogen where it is consumed.

While Rio Tinto’s chief scientist doesn’t see green hydrogen as an energy carrier, he suggested it could be used to make steel, iron and titanium, and in alumina refineries.

Fortescue and Rio Tinto to work together?

After that scepticism, it may be surprising to learn that Rio Tinto and Fortescue are now planning talks regarding green hydrogen.

According to reporting by the AFR, Rio Tinto boss Jakob Stausholm has contacted Fortescue’s leader Andrew Forrest to see if the two ASX iron ore shares can “find common ground on green hydrogen and its potential to replace fossil fuels.”

The two miners’ chief scientists will “meet and compare notes on hydrogen in the spirit of collaboration”.

However, at this stage, it’s uncertain if this will lead to the two businesses working together on decarbonisation. Fortescue reportedly doesn’t have a chief scientist at the moment, so FFI would be represented by leaders of the research team.

Forrest defends green hydrogen

In the face of Rio Tinto’s chief scientist’s criticism, Forrest acknowledged that hydrogen could have a “small impact” on the atmosphere and was quoted by the AFR:

He was quickly reminded that green hydrogen is not a greenhouse gas.

But that is like blaming the policeman for defending a house and saying the burglar is doing a good job. The world must go to green hydrogen and Rio Tinto, like every other responsible mining company around the world, know it has to come off fossil fuels.

Some scientists say it is harder than other scientists, but I can tell you we are just getting on and doing it.

We have a very collaborative relationship with Rio, and we want to make sure our chief scientists are singing off the same songbook.

Snapshot

Over the last month, the Fortescue share price has jumped 25% and the Rio Tinto share price has surged 19%.

The post Is this the beginning of a beautiful green hydrogen friendship between Fortescue and Rio Tinto? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. 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.

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