07/10/2013 - 14:17

FMG to challenge Pilbara rail ruling

07/10/2013 - 14:17

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Fortescue Metals Group will go to the WA Supreme Court to challenge the Economic Regulation Authority's decision to allow third-party access to FMG's Pilbara railway.

FMG to challenge Pilbara rail ruling

Fortescue Metals Group will go to the WA Supreme Court to challenge the Economic Regulation Authority's decision to allow third-party access to the iron ore miner’s Pilbara railway. 

The ERA ruled in August that FMG subsidiary The Pilbara Infrastructure must start negotiations with aspiring miner Brockman Mining for third-party access to the railway.

Brockman had submitted a proposal in May to gain access to the railway to haul 20 million tonnes per annum of iron ore for 20 years, starting in 2016.

FMG has commenced proceedings for declarations that Brockman Mining's proposal for access to the railway is invalid on the basis that Brockman cannot afford to pay to use the railway at this time.

FMG will also contest the ERA's determination of floor and ceiling costs for access to the railway.

The ERA announced in September that Brockman Mining would need to pay between 55 cents and $2.04 per tonne to gain access to the railway. 

FMG claims in a statement today that the ERA "made errors of law in its decision and failed to accord TPI procedural fairness in making its determination" and would pursue a judicial review of the determination.

"TPI is entirely within its rights to challenge the outcome, and has a duty to shareholders to pursue a fair and reasonable return on its world-class infrastructure," FMG chief executive Nev Power said.

"TPI cannot be expected to subsidise third party projects that are uneconomic."

FMG said it was actively negotiating with other potential third parties for access to the railway.

A Brockman Mining spokesperson said the court action was "not unexpected".

"The matters will now be resolved before the Supreme Court in the usual manner and we are prepared to defend our Access Proposal," the spokesperson said.

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