Rio wins case blocking access to rail
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MELBOURNE, Feb 11 AAP
February 11 2013, 5:52PM
The world's second largest iron ore miner, Rio Tinto, has tightened its already firm grip over the Pilbara region by winning a ruling that blocks other miners from using its rail lines.
Rio released a statement on Monday saying that the Australian Competition Tribunal had ruled that it did not have to open Rio's 1,400km of rail lines in Western Australia's Pilbara to other miners wanting to transport iron ore.
The decision applies to Rio's main Hamersley and Robe rail lines.
Fortescue Metals, Australia's third largest iron ore miner, won a High Court case last September that forced the tribunal to review its earlier decision in favour of Rio and BHP Billiton.
Fortescue has been fighting the mining giants for access to their iron ore rail lines for nearly eight years and sold third-party access to its own rail system.
Fortescue chief executive Nev Power said it was regrettable that the tribunal did not see the merits of providing third-party access to enhance competition and deliver greater productivity and efficiency benefits.
The business community has been calling for more government investment in infrastructure to tackle export bottlenecks that affect productivity and costs.
Rio Tinto Iron Ore acting chief executive Paul Shannon argued that allowing third parties to run trains on its network would create inefficiencies that would affect the economy.
"Rio Tinto runs a highly efficient railway that is fully integrated with our port and mine operations," he said in a statement.
While Fortescue ultimately built its own multi-billion-dollar rail line, it became saddled with debt doing so.
The tribunal decision does not affect Fortescue's current operations and expansion plans, it said.
The prohibitive costs of building infrastructure prevents smaller iron ore explorers from becoming successful producers and reinforces the dominance of BHP and Rio, which along with Brazil's Vale control three-quarters of the two billion tonne a year global iron ore industry.
Rio shares closed 15 cents down at $69.45, Fortescue was up six cents at $5 and BHP was 24 cents weaker at $37.71.
By Greg Roberts