Railpage Australia™ - Fortescue jumps one railway barrier

FORTESCUE Metals has won another round in its long-running quest for third-party access to Pilbara railway lines.

The Federal Court in Melbourne yesterday rejected Rio Tinto's claim that the National Competition Council should rely on a 1999 decision denying access to Robe River instead of considering Fortescue's recent application for access.

Fortescue, which has had a long-running dispute with BHP Billiton over railway access, applied in November for Rio's railway line to be declared open to third-party users.

Justice Mark Weinberg said it was clear there had been "major developments" in the Pilbara iron ore industry since the Robe case was decided in 1999.

He added that there were also differences between the cases. Robe had requested a "point-to-point" service, enabling access from specific points along the Hamersley railway line, while Fortescue was seeking access at any point along the line.

"My difficulty with [Rio's] submission lies in the premise that nothing of consequence has changed, and its somewhat bold submission that, even if it has, [the 1999] orders are, to put the matter colloquially "frozen in time"," Judge Weinberg said.

In a letter to the council dated April 30 the chief executive of Rio Tinto Iron Ore, Sam Walsh, said a study by Access Economics estimated Australia could lose $29.6 billion in gross domestic product over 20 years due to revenue losses that would flow from an open access regime.

A report by Port Jackson Partners says any supply shortfall from Rio is likely to be met by other low-cost producers such as Brazil's Vale rather than from smaller Australian miners due to railway bottlenecks under an open-access regime. "It is fairly certain that a large proportion of the volume lost by [Rio] would be lost to Australia, not just transferred to other Australian producers," it says.

--Brisbane Times