Billionaire Andrew Forrest is scaling back his plans to turn Australian miner Fortescue Ltd. into a green hydrogen heavyweight, blaming high energy prices for a setback that has prompted an overhaul of the group and 700 job cuts.

Forrest, the company’s founder and executive chairman, has been attempting to pivot from iron ore, which still generates the vast majority of revenue, by investing heavily in green technologies. The company has been hit by a slew of senior departures over the past couple of years, however, raising questions over its strategy.

A Fortescue spokesperson told Bloomberg that the goal of producing 15 million tons of green hydrogen a year by 2030 was being put on hold until electricity prices fell, and that activity on the technology was being slowed down across the board.

The world’s fourth-largest iron ore miner announced the job cuts in a statement on Wednesday as part of an overhaul to simplify the businesses’s structure, but didn’t say which parts of the group would be affected.

“It’s a business that’s run hard around its decarbonization strategy,” said Jon Bishop, an analyst at Jarden Securities. “And whilst they haven’t pointed to which divisions are affected, that part of the business has continued to burn a lot of capital.”

Green hydrogen - produced by splitting water into hydrogen and oxygen molecules using renewable energy - is yet to be commercially produced anywhere in the world. Fortescue currently makes a relatively small amount at a plant in the Pilbara region of Western Australia and last year made a final investment decision on three other projects at a cost of around $750 million.

“Our vision for Fortescue has not changed,” Forrest said in a separate statement provided to Bloomberg. “I truly believe in the power that green hydrogen will unlock for decarbonizing hard-to-abate industry,” he said, adding that Fortescue would continue to focus on green electricity in the Pilbara and North Africa and green hydrogen in places like Brazil and Norway.

Fortescue also announced on Wednesday that it would appoint Apple Paget as group chief financial officer and Shelley Robertson as chief operating officer. Paget has been acting CFO for the last 11 months.

The Australian Financial review quoted Forrest as saying on Wednesday that wars in Ukraine and the Middle East had forced up global energy prices making green hydrogen production, at scale, unviable. “In that environment you’re not going to bring in major sources of green hydrogen which relies on cheap energy prices,” he told the newspaper.

  - Bloomberg