Fortescue Metals Group Ltd is a step closer to obtaining access to railways owned by BHP Billiton Ltd and Rio Tinto Ltd after Treasurer Wayne Swan ruled they should be opened to third parties.
Rio Tinto Ltd, the world’s second largest iron ore producer, says it is disappointed by the federal government’s decision to allow third-party access to its Hamersley and Robe railway lines in Western Australia.
Swan’s decision comes after the National Competition Council (NCC) recommended that the three separate railways in the Pilbara region be opened up to third parties to improve competition in the haulage market for the metal.
“Rio Tinto is very disappointed by the Treasurer’s decision to allow third-party access to its infrastructure in the Pilbara,” Rio Tinto iron ore chief executive Sam Walsh said in a statement.
“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.”
“On consideration of the evidence presented, the NCC determined that all relevant matters for declaration are satisfied and therefore recommended the services be declared,” Swan said in a statement.
“I accept the NCC’s recommendations and I am declaring the services … for a period of 20 years commencing on 19 November 2008.”
Peter Ogden from BHP would not comment immediately.