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The Australian Competition Tribunal has determined that Rio Tinto Ltd and BHP Billiton Ltd must let smaller miners use their respective Robe River and Goldsworthy rail lines in Western Australia’s Pilbara region, while protecting Rio Tinto’s Hamersley line and BHP's Mt Newman line.
The Tribunal said Robe River and Goldsworthy dealt less with iron ore than the other rail lines, so there would be less disruption to their operators. The Robe River line will be opened up to competitors until 2018, although they had asked for 20 years of access.
The Hamersley line is the principal artery of Rio Tinto’s integrated Pilbara operations. The tribunal found that providing third-party access to Hamersley would be contrary to the public interest, and that the costs involved in providing access could outweigh benefits from avoiding line duplication.
Rio Tinto CEO Sam Walsh says the company is very pleased access to Hamersley was refused. “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,” he said. “The Tribunal accepted our longstanding argument that rail flexibility was necessary to meet mine and port scheduling requirements and that access would ‘cause significant delays in any expansion projects or innovations’ which Rio Tinto wishes to undertake.”
BHP Billiton president of iron ore Ian Ashby said the company welcomed the Tribunal's rejection of the application to access the company’s Mt Newman line, but was disappointed by the Goldsworthy decision, given its importance to the company’s iron ore business. “It is not in the public interest that our business or customers should be disadvantaged through the increased inefficiencies and costs that will result from other companies operating their trains on our rail lines,” Mr Ashby said.
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