Fortescue and Queensland reach settlement over A$66m grant

en.Wedoany.com Reported - Fortescue has reached a confidential settlement with the Queensland government over A$66m (£35m) in state funding for the company's electrolyser manufacturing plant in Gladstone, Australia, with the state government retaining the value of the investment through an asset transfer.

The plant, officially opened in April 2024, spans 15,000 square metres with an annual production capacity of over 2 gigawatts of proton exchange membrane (PEM) electrolyser stacks, and was originally intended to supply green hydrogen projects. Queensland provided the land and supporting infrastructure for the project, while the Australian government separately allocated A$44m through the Modern Manufacturing Initiative, which aims to strengthen domestic manufacturing capability.

In May 2025, Fortescue began scaling down its Gladstone operations and cutting local jobs while reassessing its green hydrogen strategy. In July, the company formally cancelled the Gladstone PEM50 hydrogen project and the electrolyser manufacturing plant, citing a "strategic shift away from electrolysers" towards technologies aimed at providing low-cost hydrogen for Australia's green industry. Fortescue stated that this adjustment was designed to support its green iron production targets.

In August 2025, Deputy Premier Jarrod Bleijie said the state government had issued compliance and default notices to Fortescue, seeking "full repayment" of the funds. Fortescue disputed the state government's basis for recovery, stating it had acted "in good faith" and continued discussions with the state government over the grant agreement requirements. In court proceedings reported in May 2026, Fortescue alleged that the state government's claim of more than A$65m was a "substantial overreach." The Queensland government maintained that the project for which the funds were originally provided was no longer proceeding and that the money should be recovered.

Under the settlement, the state government will retain the value of its A$66m investment through the transfer of the project land, a substation, and related common-user infrastructure, along with other arrangements. Both parties stated that the settlement "recognises Queensland's remaining assets and infrastructure" and allows both sides to move forward. As part of the settlement, the state government's legal proceedings have been terminated.

The initial support package was larger than the A$66m referenced in the settlement. Reports at the time estimated the full package at approximately A$92m when proposed payroll tax concessions were included. The joint statement only referenced the state government's A$66m investment and did not disclose the financial value of the transferred assets or other consideration in the settlement.