BHP, Rio keep rail from juniors

A decision by the Australian Competition Tribunal has seen BHP Billiton and Rio Tinto retain full access of their main Pilbara rail lines.

The Tribunal rejected the application by Fortescue Metals and a group of junior miners to gain access to the rail lines, finding that access by these miners to Rio’s Hammersley lines and BHP’s Newman rails “would be contrary to the public interest.”

Rio is “very pleased that the access application over our major Pilbara railway line has been refused,” the miner’s chief executive of iron ore Sam Walsh said.

“We have always been strongly of the view that our integrated operations would be severely disrupted if we were required to allow third parties to operate trains on our rail system,” Walsh added.

The Tribunal’s inquiry found that the actual costs in providing access had the potential of dwarfing whatever benefits might exist from avoiding duplication of lines.

However, despite this the Tribunal did find in favour of the applicants for access in regards Rio’s Robe River railway and BHP’s Goldsworthy line.

BHP “are disappointed by their decision to grant declaration of our Goldsworthy rail line given its importance to our iron ore business,” iron ore chief executive Ian Ashby said.

In regards to Robe River, despite access being granted, the Tribunal only allowed this until 2018 instead of for 20 years as per the application to the Tribunal.

BHP is currently reviewing the decision on its Goldsworthy lines, and whether it may appeal the ruling via the Federal Court.

 

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