$400 million electric heavy equipment order from China is biggest ever (so far)

Fortescue orders XCMG electric mining equipment worth $400 million

Australian mining company Fortescue is making headlines again, after it placed a huge, $400 million order for over 100 new electric equipment assets with Chinese heavy equipment company XCMG (Xuzhou Construction Machinery Group). The deal is the largest single equipment export deal in XCMG’s history.

The $400 million contract also marks XCMG’s largest mining equipment order, and will see a wide array of battery electric heavy equipment that includes electric wheel loaders, electric dozers, electric semi trucks (or “prime movers” in Euro-speak), and electric graders delivered to Fortescue’s Pilbara mining operations in stages between 2025 and 2030.

Fortescue says the use of this equipment will displace millions of gallons of diesel fuel at the company’s iron ore operations over the life of the assets, helping to push down global diesel demand even further.

“We’re moving rapidly to decarbonize our Pilbara iron ore operations and eliminate our Scope 1 and 2 terrestrial emissions by 2030. To achieve this target, we will need to swap out hundreds of pieces of diesel mining equipment at the end of their life with zero emissions alternatives,” explains Fortescue Metals Chief Executive Officer, Dino Otranto. “As the global mining industry continues to evolve, we’re proud to be at the forefront of driving innovation in value adding green technology and showing the world that industry can decarbonize.”

We’ve written about the ways that rising global demand for nickel, lithium, and phosphates combined with the natural benefits of electrification are driving the adoption of electric mining machines – but this particular mine is different, as its primary product, iron ore, has much broader applications beyond electrification. As such, it is arguably the most significant mine electrification project currently going.

XCMG, for its part, is embracing electrification across its product lines. “XCMG is dedicated to (long-term) and sustainable development, offering high-end, intelligent and green ‘product + scenario’ full life cycle solutions to global customers,” offered XCMG Chairman, Yang Dongsheng, at Bauma China at the announcement of the Fortescue contract award. “The company has achieved green electrification across its entire product range, with new energy products accounting for 18 percent of revenue, leading the industry’s green and low-carbon transformation.”

Electrek’s Take

Fortescue and XCMG sign largest ever Chinese equipment export deal; via Fortescue.

With billions of dollars on the line and pressure to reduce carbon emissions coming from all sides, it should come as no surprise that the race is on to bring practical, electric, and autonomous heavy mining equipment to market. At CES 2024, electric equipment from Hyundai, Bobcat, Volvo CE, and Caterpillar garnered lots of attention with their innovative concepts, and analysts like IDTechEx estimate that a single 150-ton haul truck can use over $850,000 worth of fuel in a single year.

Meanwhile, big electric haul trucks like this 240 ton unit from Caterpillar can, in certain use cases with high amounts of regenerative braking, operate without any significant cost to recharge. At that point, the reduced maintenance and downtime of BEVs compared to diesel vehicles becomes icing on the TCO cake.

We spoke to Fortescue Zero executives last month on a special interview episode of Quick Charge. Check it out, below, then let us know what you think of this heavy dollar deal in the comments.