The competition watchdog the State Government it must toughen up oversight of prices charged at Port Hedland’s Utah Point facility if it wants to privatise the bulk export terminal.
In a letter to the Legislative Council committee examining the sale of Utah Point, the ACCC described pricing at the terminal as a “key term of access” and said the legislation should include terms allowing its users to challenge price rises imposed by a new private owner.
“Without sufficient regulatory arrangements being put in place during the privatisation process, the privatised owner will have the incentive and ability to use its market power to raise prices above efficient levels and/or reduce service quality,” the letter said.
The letter supports the arguments of mid-tier miners that use the facility, including Atlas Iron, Mineral Resources and Consolidated Minerals.
They have opposed privatisation, arguing charges at the terminal are already too high. They fear any price hikes could put their businesses at risk, particularly if iron ore prices again begin to fall.
The committee is due to deliver its report on the legislation enabling the proposed privatisation on Thursday.