Inside Queensland’s bid to claw back $66 million from Fortescue

Queensland has launched a legal battle to recover $66 million from mining giant Fortescue, arguing the company's withdrawal from a green hydrogen project caused substantial economic losses. The state government claims it missed out on the chance to develop a $1.7 billion annual export industry in hydrogen, which could have positioned Queensland as a global leader in renewable energy production. The dispute centers around Fortescue's decision to abandon its electrolyser manufacturing facility in Gladstone, central Queensland, and whether the company violated a funding agreement with the state. The case involves a complex financial and strategic disagreement. According to Supreme Court filings, the state government has enlisted experts, including consulting firm KordaMentha, to quantify its economic losses. These experts aim to demonstrate that the hydrogen project would have created long-term opportunities for Queensland, including job creation and infrastructure development. The government argues that Fortescue's withdrawal disrupted plans to build a sustainable manufacturing base for green hydrogen, which was aligned with broader state policies aimed at boosting advanced manufacturing. Fortescue, owned by iron ore magnate Andrew Forrest, disputes these claims. The company maintains that the funding agreement did not include references to the state’s Hydrogen Industry Strategy or its 10-year Advanced Manufacturing Road Map. It contends that the government has no valid legal basis for seeking compensation, emphasizing that the terms of their agreement were clear and narrowly defined. In response to the state’s amended claim, Fortescue has been given until July 22 to challenge the new allegations in court. The project in question was initially presented as a key component of Queensland’s strategy to expand into renewable energy. In 2021, then Premier Annastacia Palaszczuk and her deputy, Steven Miles, visited the Gladstone site alongside Andrew Forrest. At the time, the project was framed as a catalyst for economic growth, promising 48 high-end manufacturing jobs and the potential to secure additional contracts for related industries such as battery production, wind turbines, and solar power systems. The state government believed the project would help position Queensland to meet rising global demand for green hydrogen, especially in Asian markets like South Korea and Japan. However, Fortescue abruptly terminated the project, citing internal restructuring and shifting business priorities. This decision coincided with the cancellation of a similar initiative in Arizona in 2025, which occurred amid reduced federal support for clean energy under U.S. President Donald Trump. Critics, including Deputy Premier Jarrod Bleijie, have described the Queensland project as a "vanity project" and a "terrible deal," suggesting the state overcommitted to an uncertain venture. Legal proceedings have revealed tensions between the two parties. During a preliminary hearing, the state argued that Fortescue misunderstood the scope of its obligations, misinterpreting the government’s intent to support the hydrogen industry. The government emphasized that its initial approval of the project was based on the belief that it would contribute significantly to the state’s economic goals. Documents show that the funding agreement was reached during a period when Queensland was actively pursuing its 10-year manufacturing roadmap, underscoring the alignment between the project and state objectives. As the legal battle unfolds, both sides remain entrenched in their positions. The outcome of this case could set a precedent for how governments assess and pursue economic partnerships with private companies in the renewable energy sector. With the deadline approaching for Fortescue to respond to the amended claim, the court’s ruling may determine whether Queensland can successfully reclaim the disputed funds or if the case will be dismissed.