High Court gives glimmer of hope to FMG

Fortescue Metals Group (FMG) has moved one step closer to negotiating third party rail access to the BHP Billiton Iron Ore’s Mt Newman and Goldsworthy rail lines, after the High Court ruled rail track services provided by the railways are not excluded, by the 'production process' exemption, from coverage under Part IIIA of the Trade Practices Act.

Fortescue Metals Group (FMG) has moved one step closer to negotiating third party rail access to the BHP Billiton Iron Ore’s Mt Newman and Goldsworthy rail lines, after the High Court ruled rail track services provided by the railways are not excluded, by the ‘production process’ exemption, from coverage under Part IIIA of the Trade Practices Act.

According to FMG’s executive director operations Graeme Rowley, the win has provided Fortescue with the energy they need to keep on going.

“But it has been a long running saga and an unnecessary waste of significant time and money that could have easily been avoided if BHP Billiton Iron Ore (BHPBIO) had simply agreed to negotiate rail access on commercial terms,” he said.

“Arguments that this is a disincentive to rail investment and, as a result, no-one will do it are rubbish. Fortescue has done it. We have built a railway under conditions of open access and negotiated access can provide both parties with a superior outcome compared to a regulated regime and that has always been our goal,” Rowley said.

Fortescue applied to declare the Newman railway line in 2004.

As a result of the High Court ruling, the decision on whether the Mt Newman railway should be declared now rests solely with the Australian Competition Tribunal. The Tribunal is currently receiving submissions from the parties and is expected to hear the matter around March/April next year.

If the Australian Competition Tribunal rules that the Newman line should be declared, BHPBIO will be compelled to negotiate third party access terms with Fortescue.

Fortescue Metals Group

08 6218 8888

www.fmgl.com.au

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