Third party iron ore access decision expected today

<p>A decision is expected today (Monday, May 22) in the battle over access to part of BHP Billiton’s rail track in Western Australia’s Pilbara region. </p> <p>Fortescue Metals wants access to a 295-km section of the Mt Newman railway line, which would link its $1.8bn iron ore operations to Port Hedland. </p> <p>The National Competition Council (NCC) recommended in March that the rail infrastructure should be opened up to third parties.</p> <p>Federal treasurer Peter Costello will decide whether to uphold that decision or to accept BHP and Rio Tinto’s claims that it would not be in the national interest. </p> <p>Fortescue’s Mindy Mindy mine sits next to BHP’s existing rail line which is estimated to be worth about $2bn.</p> <p>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. </p> <p>Fortescue has 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.</p> <p>The NCC’s report found that the Mount Newman line could be expanded to take third party ore. </p> <p>BHP had slammed the NCC’s draft recommendation as "fundamentally flawed" and "grossly inadequate". </p> <p>Rio Tinto has also supported BHP’s argument, with both pressing to maintain control of their interests. </p> <p>A decision in favour of Fortescue would allow rival iron ore producers to negotiate with BHP under the Trade Practices Act for access to the rail lines. </p> <p>Meanwhile, China’s hopes of limiting iron ore price increases to 10% have again been thwarted with Korea’s Posco and Mittal Steel agreeing to separate deals last week.</p> <p>Both steelmakers agreed to 19% increases with Rio and Brazil’s CVRD respectively.</p> <p>BHP Billiton is yet to announce any price deals as most of their iron ore trade is with China, who is yet to agree to any deals.</p> <p>China’s largest steelmaker, Baosteel &#8211 which is representing the country’s major steel companies &#8211 is still waiting for producers to agree to an increase of 10%, a figure now unlikely.</p> <p>ABARE figures suggest world iron ore trade will increase by 7.6% in 2006, to 706m tonnes.</p> <p>China, which is worth about $4bn to Australia’s iron ore producers, will import about 44% of the world’s trade.</p> <br />