No rail room for Brockman: Fortescue
Fortescue Metals Group Ltd has slammed Brockman's attempt to break its Pilbara rail line monopoly, saying there was "no logical basis" for the iron ore junior to infer its system had execess capacity.
In a submission to Western Australia's Economic Regulation Authority, Fortescue said "there was no capacity available to Brockman" on the railway, which is owned by its infrastructure arm, The Pilbara Infrastructure (see Tim Treadgold's Is it iron curtains for small producers?).
The miner also said opening its rail line to Brockman - which is seeking annual shipping capacity of up to 20mt - was not in the public interest, would not increase competition and would "result in the inefficient use of TPI’s railway".
"TPI’s railway was designed, constructed and funded by Fortescue to meet its sale and production targets," Fortescue said.
"There is, therefore, no logical basis for Brockman to infer, as it has in its access proposal, that Fortescue has designed, constructed and funded a railway system with capacity surplus to Fortescue’s needs."
Brockman has previously negotiated with Fortescue but is now attempting to gain third-party access to the miner's rail line through WA’s ERA .
TPI is expanding its railway to carry 155mtpa to cater for a ramp up in Fortescue production, scheduled to finish in the December quarter.
"As Fortescue is utilising all the capacity of TPI’s railway, unless there is further expansion beyond Fortescue’s planned expansions, there is no capacity available to Brockman," the miner said.
TPI has told Brockman the 'ceiling' price for hauling 20 million tonnes of iron ore on its Pilbara line was $576 million a year, and the total “floor” price was $73 million a year.