AusRAIL, Market Sectors

Fortescue to go ahead with $600m Pilbara rail line

<p>Fortescue Metals Group could begin exporting iron ore from Western Australia’s Pilbara region by January 2008 after gaining state government approval for a rail line this week.</p> <p>Fortescue has waged a long-running fight for access to Pilbara rail infrastructure so it can begin exporting up to 45m tonnes of iron ore each year.</p> <p>The $3.7bn project has been stalled because the two major iron ore miners &#8211 BHP Billiton and Rio Tinto &#8211 have refused access to their rail lines on the basis that it would slow their export volumes.</p> <p>Federal treasurer Peter Costello decided by default of not making a decision that the existing rail infrastructure would not be opened up to third parties.</p> <p>Fortescue is now expecting a special railway licence and other approvals to be finalized this week to allow it to build a 260 km rail line.</p> <p>Construction on the $600m project is about eight weeks behind schedule, but Fortescue hopes to load its first iron ore shipment by late January 2008.</p> <p>The plans would make Fortescue the state’s third biggest iron ore producer behind BHP Billiton and Rio Tinto.</p> <p>It came less than 24 hours after about 5% of the company was snapped up by what is rumoured to have been a Chinese investment group for about $148m.</p> <p>The 13.2m Fortescue shares were sold on Wednesday for about $11.22 each, well ahead of its regular trading price of $10.50 a share.</p> <br />