Fortescue tries to bridge troubled water

The decision to declare the Robe River, Hamersley and Goldsworthy rail lines open for third party access has the potential to create a Dalrymple Bay in the Pilbara, Minerals Council of Australia chief executive officer Mitchell Hooke has told MINING DAILY.

The decision to declare the Robe River, Hamersley and Goldsworthy rail lines open for third party access has the potential to create a Dalrymple Bay in the Pilbara, Minerals Council of Australia chief executive officer Mitchell Hooke told Australian Mining.

“In this instance, a regulator will arbitrate the terms and conditions under which a third party has access to privately owned and operated infrastructure,” Hooke said.

“The decision underscores the anomalies with the current legislation. It was never intended that the Treasurer or Government would have to make a determination on access to private infrastructure.”

Recently, the Federal Treasurer Wayne Swan accepted a recommendation from the National Competition Council to declare the Robe River, Hamersley and Goldsworthy rail lines open for third party access.

In January this year, Fortescue lodged an application to the Competition Council asking for third party access to the rail-lines.

Fortescue’s executive director of operations Graeme Rowley said the economic, social and environmental arguments for opening the rail lines to third party access were compelling.

“We are pleased Treasurer Wayne Swan has accepted the National Competition Council’s recommendation to declare the rail lines,” Rowley said.

“This is a great decision for Fortescue, for junior miners and for Australia’s export revenue and the economic social dividends it provides.

“We are now looking forward to negotiating commercial access terms with Rio Tinto and BHP Billiton rather than wasting more money on costly legal appeals.”

In a bid to smooth the troubled waters, Fortescue wrote a letter to BHP Billiton and Rio Tinto asking for a Rail Cooperation Agreement between the three parties.

However, Rio Tinto has far from welcomed the agreement.

A spokesperson for Rio Tinto told Australian Mining that the company is considering launching an appeal on the Federal Governments ruling.

“Rio Tinto has been informed that we have 21 days to lodge a formal appeal if we so choose and it has already been decided that we will,” the spokesperson said.

Rio Tinto’s Chief executive officer Sam Walsh said the company’s appeal will be launched within a few days and that the company was disappointed by the Treasurer’s initial decision.

“Far from producing a clear benefit to Australia, the decision brings a significant risk of revenue loss to the national economy, resulting in a present-value cost to GDP of up to $30 billion,” Walsh said.

“This is a cost the nation can ill-afford at this time of economic uncertainty.

“Allowing third-parties access will impede this efficiency and reduce the tonnage that can be pushed through this system. This decision will reduce total tonnage exported using the system — not increase it and therefore it is difficult to see how it can be in the national interest.”

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