orange gradient

Draft NCC Recommendation Could Cost Australian Iron Ore Exports

BHP Billiton has been advised by the National Competition Council (NCC) that it has issued a draft recommendation to declare a rail track service on the Mt Newman iron ore railway line under part IIIA of the Trade Practices Act.

President BHP Billiton Iron Ore Graeme Hunt said the company was reviewing the implications of the draft recommendation and would be making extensive submissions to the NCC as to why it believed the draft recommendation was incorrect.

“The Mt Newman line is an integral part of our iron ore production process and is one of the most advanced heavy-haulage railways in the world. Its efficient operation and expansion have played a crucial role in the growth of iron ore exports from Western Australia,” he said.

“At a time of massive demand for Australia’s iron ore it makes absolutely no sense to be proposing to undermine one of the industries that has performed best in expanding export-related infrastructure.

“The potential negative impacts of declaration include delays to further expansions, increased system complexity and reduced incentive for investment, which will result in significantly higher costs for one of Australia’s most important export industries.

“Any possible benefit from declaration of the Mt Newman line would be dwarfed by these additional costs and, based on public comments by FMG about the Mindy Mindy project, would be highly speculative.”

The NCC will now accept public submissions on its draft recommendation prior to a final recommendation being made to the Federal Treasurer, which is likely in the early part of 2006. Following this, the Treasurer will have 60 days to decide whether the Mt Newman line will be declared.

Proceedings underway in the Federal Court of Australia to determine whether the Mt Newman railway line is part of an integrated production process, and therefore exempt from declaration under Part IIIA of the Trade Practices Act, are continuing.