AusRAIL, Market Sectors

BHP raises national interest again after Pilbara rail access judgment

<p>A Federal Court setback prompted BHP Billiton today (Monday, December 18) to reiterate its warning that unfettered access to its 100m tonnes a year Pilbara rail system would harm growth in iron ore exports.</p> <p>The Federal Court ruled that BHP Billiton’s Mt Newman and Goldsworthy iron ore rail lines were not part of the company’s production process. </p> <p>BHP Billiton is reviewing judgment in a case the company brought itself to define the term &#8220process&#8221, and will consider its options with regards to an appeal.</p> <p>A company spokeswoman said the judgment was surprising, but agreed it was made on a fairly narrow point.</p> <p>Chris Lynch, BHP Billiton executive director and group president carbon steel materials, said he was &#8220extremely disappointed with the decision, which threatened the further growth of one of Australia’s critical export industries.</p> <p>"It is important to remember that this decision has much broader implications beyond BHP Billiton,&#8221 he said. </p> <p>&#8220Open access to dedicated rail infrastructure would compromise the efficient production of iron ore and cause delays in future investment decisions, making Australian producers less reliable.</p> <p>"We will use all available legal avenues to protect the investments of our shareholders and joint venture partners and the integrity of our production process."</p> <p>The Federal Court ruling does not automatically enable a third party to run its trains on BHP Billiton’s Pilbara iron ore rail lines to Port hedland, BHP said. </p> <p>Separate proceedings underway in the Australian Competition Tribunal will now determine the broader question of whether the rail lines should be &#8220declared&#8221 pursuant to Part IIIA of the Trade Practices Act.</p> <p>Fortescue Metals Group initiated the tribunal proceedings in June after federal treasurer Peter Costello had declined to follow a National Competition Council recommendation that the Mt Newman rail line be declared. </p> <p>It was about this time that BHP made its initial warning about export growth and the national interest possibly being impinged.</p> <p>It was expected that a full hearing of the facts, including expert opinion, would be conducted during the second half of 2007, BHP said.</p> <p>Mr Lynch also said there was a sensible alternative that would provide a workable approach to infrastructure access, without significantly impacting BHP Billiton’s iron ore production process.</p> <p>"We have been actively engaged in discussions with the WA State Government about developing a revised iron ore haulage regime based on BHP Billiton’s current obligations under the Rail Transport Agreement,&#8221 he said. </p> <p>&#8220It is our understanding that the state plans to complete this process by the middle of 2007."</p> <br />