Fortescue loses bid for access to WA rail line

Staff WriterMay 23, 2006, 12:00 amMay 23, 2006

The Fortescue Metals Group will likely appeal a decision by the federal treasurer, Peter Costello, not to grant it access to Western Australia’s Mount Newman rail line. Mr Costello had until yesterday (Monday, May 22) to make a decision on the National Competition Council’s (NCC) draft recommendation in March that the rail infrastructure be opened up to third parties. A decision in Fortescue’s favour would have allowed the iron ore miner to share a 295-km section of a track linking the iron-ore rich inland with Port Hedland. Mr Costello said that with the 60-day period now passed, by default under the terms of the Trade Practices Act, the decision was taken not to declare the rail open to other users. &#8220I do not propose to provide any additional comment on this matter, which may be subject to further review processes,&#8221 Mr Costello said in a statement. The decision has further implications for other smaller operators who are trying to compete with industry heavyweights Rio Tinto and BHP Billiton. If any appeal or re-application for access is successful, it would allow other iron ore producers to negotiate with BHP under the Act for access to the rail lines. Fortescue was unable to be contacted for comment this morning, but the company’s head of government relations, Julian Tapp, told the ABC yesterday that it would fight on behalf of the public interest. &#8220We believe the right thing is open access and although our Mindy Mindy project has other ways of getting developed, I think third parties that are looking to develop iron ore deposits in the Pilbara don’t have potential solutions and an opportunity’s been missed,&#8221 Mr Tapp said. BHP &#8211 which owns the Mt Newman track &#8211 and rival Rio Tinto had both argued against the NCC’s recommendation because they felt it would not be in the national interest. BHP chief executive Chip Goodyear said the legislation required that access be applied &#8220sparingly&#8221. &#8220BHP Billiton has invested more than $2bn, in today’s dollars, developing our rail line in conjunction with our mine and port operations,&#8221 Mr Goodyear said. &#8220This decision should help in continuing to retain their [stakeholder’s&#93 support, while also helping to ensure the ongoing integrity and reliability of the system.&#8221 He said a state-based access regime for rail haulage already existed and BHP would work to ensure the state government improved it. Fortescue’s Mindy Mindy mine is near BHP’s existing rail infrastructure in the Pilbara. The NCC’s report in March found that it would be more efficient for BHP to share the line, rather than Fortescue building its own line. Third party users would have had to negotiate access to the line with BHP had the decision been made in their favour. Fortescue had also requested access to a 17km-section of the Goldsworthy Railway line where it crosses the Mt Newman railway line to port facilities at Inucane Island, Port Hedland. Fortescue will be able to apply in writing for a review of the decision, which must be lodged within 21 days.