Rio Tinto retains exclusive rights for Pilbara rail lines

10 February 2013 (Last Updated February 10th, 2013 18:30)

Diversified mining firm Rio Tinto has won a long-standing legal battle with fellow Australian iron ore producer Fortescue Metals to deny shared rail network access in Western Australia.

Iron ore train, Pilbara

Diversified mining firm Rio Tinto has won a long-standing legal battle with fellow Australian iron ore producer Fortescue Metals to deny shared rail network access in Western Australia.

The company secured a major victory when the Australian Competition Tribunal sided with the view that Rio Tinto did not have to open up its Hamersley and Robe rail lines to other users.

Over several years, Fortescue Metals sought to access major rail lines in the Pilbara region based on competition grounds to transport its mined ore to port areas.

Both Rio Tinto and BHP Billiton, which owns the Goldsworthy line in Western Australia, opposed sharing their network.

Rio Tinto Iron Ore acting chief executive Paul Shannon said: "Rio Tinto runs a highly efficient railway that is fully integrated with our port and mine operations. This would be severely hindered if third parties were allowed to run trains on our rail network, not to mention the knock-on negative effect on the Western Australian and national economies from creating such inefficiencies."

The rail lines are a significant part of an integrated supply chain for iron ore transport from the Pilbara region, translating to considerable cost saving for the companies.

"The rail lines are a significant part of an integrated supply chain for iron ore transport from the Pilbara region."

In October 2008, the federal government demanded that competing iron ore producers were allowed access to these railways for 20 years.

However, Rio Tinto appealed to the High Court against the decision last year, which referred it to the Australian Competition Tribunal.

Fortescue Metals has expressed disappointment at the decision that set aside the original view of treasurer Wayne Swan, calling for the opening of the rail lines to other users.

The company, which now has a fully owned rail infrastructure, noted that the decision would not affect its current operations and expansion plans.

Fortescue CEO Nev Power said: "Fortescue will continue to provide third party access to our own rail system and will continue to advocate for third party access for all Pilbara rail infrastructure."


Image: Rio Tinto has an integrated rail infrastructure in iron ore rich Pilbara. Photo: courtesy of Rio Tinto.

NRI Energy Technology