(Yicai) Sept. 10 -- Australia's Fortescue plans to expand procurement in China, its biggest market for steelmaking materials, as the world’s fourth-largest iron ore producer steps up investment in green technologies.

China will remain Fortescue’s largest destination for iron ore sales over the next two decades and also serve as a key sourcing hub, senior executives of the Perth-based miner told Yicai in an interview yesterday.

Global mining firms, including Fortescue, are investing heavily in technologies to curb greenhouse gas emissions, as the steel and mining sectors are among the biggest contributors to climate change.

In 2022, Fortescue announced a USD6.2 billion decarbonization program, of which USD800 million has already been spent, Chief Financial Officer Apple Paget told Yicai.

During the fiscal year ending September 2026, the company plans to allocate another USD900 million to USD1.2 billion to decarbonization projects, covering proven technologies, power generation, energy storage, and a green mining fleet, she added.

Fortescue will continue to raise its procurement in China because Chinese equipment offers advantages in cost, delivery, and technological innovation, CFO Paget said. Purchases will focus on two areas: green mining equipment and green power equipment, including solar, wind, and energy storage systems from local suppliers, she added.

Agustin Pichot, Fortescue’s chief executive of growth and energy, said China will play a crucial role in the sector’s decarbonization because of the scale and speed of its development in new energy and next-generation technologies.

One example is Fortescue’s deal with Chinese heavy machinery maker XCMG Group signed late last year. Under the agreement, XCMG will deliver over 100 zero-emission heavy mining vehicles for Fortescue’s Pilbara operations in Western Australia by 2030. The order, valued at more than USD400 million, is the largest overseas mining equipment contract in XCMG’s history.

Besides XCMG, Fortescue is also strengthening ties with other Chinese partners to enhance its environmental performance and product quality. In June 2023, it signed a memorandum of understanding with China Baowu Steel Group to jointly explore low-carbon ironmaking technologies. The partnership covers iron ore beneficiation, renewable energy, and green hydrogen development.

Editor: Emmi Laine