FMG’s hush-hush costings angers Flinders

Fortescue Metals Group’s Infrastructure arm has drawn ire from Flinders mines for being secretive over its costing details.

Flinders Mines said costing estimates by The Pilbara Infrastructure is ‘difficult to understand’.

Flinders made a submission to the Economic Regulation Authority saying TPI’s ‘lack of transparency’ meant contesting its costing structure was tough, The West Australian reported.

“Without access to TPI’s 2013 cost model, Flinders wishes to reserve its right to challenge that cost model, should it underpin any of TPI’s future prices in response to any access request made in future by Flinders,” Flinders said.

Flinders Mines secured a binding, non-exclusive memorandum of understanding with four Chinese mills in March. The contracts brought it a step closer to realising its Pilbara mining project.

The agreements permitted Chinese entities to closely examine ore from Flinders to see if it matched their iron making operations.

Only three submissions were handed in before deadlines for the public submissions closed on Tuesday. Brockman Mining also submitted a claim with the ERA, besides rail haulage company Aurizon.

When Brockman Mining asked for access to its Pilbara rail line, TPI gave a floor cost of $73.4 million and a ceiling cost of $575.6 million.

Although the EPA opened the TPI costings for public comment, TPI requested the WA economic regulator not to disclose details of the proposal.

North West Infrastructure did not lodge a submission, even after pondering on the issue in 2010. The Brockman and Atlas vehicle has the rights to build a 50 million-tonne-a-year multi-user berth at Port Hedland.

Atlas Iron also did not lodge a submission. It is in direct negotiations with Fortescue for access to its port and rail infrastructure.

The port authority revealed a shortlist of two consortia to build a multi-user facility at Esperance Port. The port is on the cusp of a financing deal for a new iron ore berth.

Qube Bulk, Brookfield Infrastructure, and a consortium involving McConnell Dowell Constructors, Asciano and Japan’s Marubeni are competing for the right to construct the berth.

The two groups are required to illustrate detailed engineering plans, along with economic feasibility studies by March.

Esperance Port chief executive Shayne Flanagan refused to give a date on when the contender would be selected.

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