👉 Background: Fortescue Metals is the mining giant founded by Andrew "Twiggy" Forrest. It's the fourth largest iron ore producer in the world.

👉 What happened: After conquering the mining world, "Twiggy" has been trying to conquer the renewable energy world. Now, Fortescue has signed a 25-year 'offtake deal' with Genex Power's solar project. We're talking a $600m solar farm and energy storage project.

👉 What else: This deal gives Fortescue Energy dibs on the energy that will fuel their green hydrogen and ammonia projects. So with the offtake agreement, Fortescue will take up the energy they need.

What's the key learning?

💡An offtake agreement is an understanding where a buyer promises to buy future products from a producer. And, this 'understanding' isn't just a shake of the hand or mutual wink - it's legally binding.  

💡This agreement gives the producer a guaranteed buyer for their product, and it gives the buyer a reliable supplier. So, the offtake agreement between Fortescue and Genex is about providing security to both parties.

💡Offtake agreements are pretty common across manufacturing industries:

• Tesla has entered into offtake agreements to secure lithium supply with Liontown Resources.
• Starbucks has entered into offtake agreements with farmers for their coffee supply.

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