Fortescue considers fresh appeal after losing battle for Rio rail access

FORTESCUE METALS is considering another appeal after suffering a defeat in its long battle for third-party access to Rio Tinto's rail infrastructure in the Pilbara.

FORTESCUE METALS is considering another appeal after suffering a defeat in its long battle for third-party access to Rio Tinto's rail infrastructure in the Pilbara.

After almost six years of legal dispute, the Australian Competition Tribunal decided on Monday Rio did not have to open up its Hamersley and Robe rail lines to Fortescue.

The decision, which Rio described as "great news" and Fortescue said was "regrettable", came as the Northern Territory government offered to provide 10 years' gas supply to support Rio's Gove alumina refinery in Nhulunbuy.

Sandeep Biswas, chief executive of Rio's struggling Pacific Aluminium division, acknowledged the "important" offer from the Territory government which would be considered along with the future of the loss-making Gove refinery at Rio's board meeting this week - ahead of Thursday's 2012 profit result.

Fortescue had appealed against a 2008 decision by Treasurer Wayne Swan, effectively that Rio Tinto would not have to provide open access to its Hamersley and Robe Railway lines for a period of 20 years. Fortescue went all the way to the High Court which last October decided the dispute should be sent back to the Australian Competition Tribunal for fresh consideration.

Fortescue chief Nev Power said it was "regrettable that the Competition Tribunal did not see the merits of providing third-party access to this infrastructure to enhance competition and thereby deliver greater productivity and efficiency benefits for all of Australia".

Fortescue said the tribunal's decision did not affect its current operations and expansion plans, which used the company's existing rail infrastructure, although it is understood that an appeal may be considered to preserve options for the future.

"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," Mr Power said.

Rio Tinto's acting chief executive for iron ore Paul Shannon - filling in for new chief executive Sam Walsh, elevated after last month's shock dismissal of former chief Tom Albanese - said the tribunal's decision was "great news".

"Rio Tinto runs a highly efficient railway that is fully integrated with our port and mine operations," Mr Shannon said. "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."

Shares in Rio Tinto, which reports its full-year profit on Thursday, fell 15¢ or 0.2 per cent to $69.45 on Monday, while shares in Fortescue rose 6¢ or 1.2 per cent to $5.00, suggesting the market was not focused on the rail access decision.

One mining analyst, speaking off the record, said Rio had been expected to win the case, as the rail lines were undoubtedly part of its integrated supply chain for iron ore from the Pilbara.

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