Competition Tribunal verdict on rail line access in WA
Rio Tinto has won a long struggle to restrict rivals from using its main railway to haul iron ore, but BHP Billiton may appeal after it was ordered to open up its own line.
Image courtesy of BHP Billiton
The two mining groups, the world's second and third biggest iron ore producers, have been fighting moves to allow other miners to use their private railways in the Pilbara region in West Australia, where their flagship mines are located.
Both firms had appealed to the Australian Competition Tribunal (ACT) earlier decisions by the country's treasurer Wayne Swan to open up rail lines to other users.
The Tribunal ruled on June 30th that providing third-party access to Rio's Hamersley line was "contrary to the public interest", Rio said in a statement.
Hamersley is Rio's most important railway, linking 10 of its 12 iron ore mines to the coast.
The Tribunal also decided that the Robe River line should be declared, but only until 2018, rather than for 20 years as the applicants wished.
"We are very pleased that the access application over our major Pilbara railway line has been refused," said Sam Walsh, who heads Rio's iron ore unit.
"We have always been strongly of the view that our integrated operations would be severely disrupted if we were required to allow third parties to operate trains on our rail system."
BHP said it was considering a possible appeal after the Tribunal gave access to its private Goldsworthy railway. The company is entitled to appeal the decision via the Full Bench of the Federal Court of Australia.
BHP has complained the access will dilute $10 billion in savings stemming from a proposed tie up with the iron ore operations of Rio by keeping the two companies from maximising deliveries.
Ian Ashby, president of iron ore for BHP, said, “While we welcome the Tribunal’s decision to reject the application for access to our Newman line, we are disappointed by their decision to grant declaration of our Goldsworthy rail line given its importance to our iron ore business.
“It is not in the public interest that our business or customers should be disadvantaged through the increased inefficiencies and costs that will result from other companies operating their trains on our rail lines.”
Following the Tribunal's decision, access seekers may now negotiate with BHP Billiton for access to the Goldsworthy railway.
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