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Tribunal Decision Protects Rio Tinto's Integrated Rail Network In The Pilbara

Aug 9, 2010 - 9 years ago

By Supply Post

The Australian Competition Tribunal handed down its determinations in response to the applications by Rio Tinto to review the decisions by the Federal Treasurer to declare the Hamersley and Robe River railway lines available for third party access under Part IIIA of the Trade Practices Act.

The Tribunal decided that a declaration should not be made with respect to the Hamersley line, finding that providing third-party access in this way would be "contrary to the public interest". The Hamersley line is the principal artery of Rio Tinto's integrated operations in the Pilbara, linking 10 of its 12 mines to the coast.

The Tribunal also decided that the Robe River line should be declared, but only until 2018, rather than for 20 years as the applicants wished.

Sam Walsh, Rio Tinto chief executive - Iron Ore and Australia, said, "We are very pleased that the access application over our major Pilbara railway line has been 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."

The Tribunal also found that the costs involved in providing access 'had the very real potential of dwarfing whatever benefits might exist from avoiding duplication of lines.' The decision is a significant one, covering many complex issues, and Rio Tinto is now considering it in detail.

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