Fortescue and the Queensland Government have reached a confidential settlement over A$66m (£35m) in state funding provided for the company’s electrolyser manufacturing facility in Gladstone, Australia.
Fortescue officially opened the 15,000-square-metre facility in April 2024, with capacity to manufacture more than 2GW of proton exchange membrane (PEM) electrolyser stacks a year. The equipment was intended to supply green-hydrogen projects.
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Queensland provided land and enabling infrastructure for the project, while the Australian Government separately contributed A$44m through the Modern Manufacturing Initiative, a grant programme established to strengthen domestic manufacturing capability.
Fortescue began winding down activity at Gladstone in May 2025, including job cuts at the site, as it reassessed its green-hydrogen strategy. In July, the company formally cancelled the Gladstone PEM50 hydrogen project and the electrolyser manufacturing facility, citing a “strategic shift away from electrolysers” towards technologies aimed at providing lower-cost hydrogen for green industry in Australia. Fortescue said the change in direction was intended to support its green-iron ambitions. The Queensland Government subsequently sought the return of its A$66m funding contribution, while Fortescue said it would return funds where required under the grant agreement.
In August 2025, Deputy Premier Jarrod Bleijie said the State had issued Fortescue with a notice to comply and a default notice and was seeking “full reimbursement” of the contribution.
Fortescue disputed the basis for the State’s recovery action. The company said it was acting “in good faith” and remained in discussions with the Queensland Government over the requirements of the grant agreement. In court proceedings reported in May 2026, Fortescue described the State’s claim for more than A$65m as a “material overreach”.
The Queensland Government maintained that the funding should be recovered because the project for which it had been provided was no longer proceeding.
The dispute has now been resolved through a settlement whose terms are confidential. Under the agreement, the State will retain value from its A$66m investment through the transfer of the project land, an electrical substation and associated common-user infrastructure, together with other arrangements.
The parties said the settlement “recognises the assets and infrastructure remaining in Queensland” and allows them to move forward. The State’s legal action has been discontinued as part of the settlement.
The original support arrangement was broader than the A$66m contribution referred to in the settlement. Contemporary reporting valued the wider package at about A$92m when proposed payroll-tax concessions were included. However, the joint statement refers specifically to the State’s A$66m investment and does not disclose the financial value of the assets transferred or any other consideration under the settlement.
