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From the Business Spectator

Industry coalition presses BHP-Rio for third party access

BHP Billiton Ltd and Rio Tinto Ltd have been urged to allow third party infrastructure access by a coalition of the Western Australian government and junior iron ore miners.

The North West Iron Ore Alliance - comprising of Atlas Iron Ltd, BC Iron Ltd, Brockman Resources Ltd, and FerrAus Ltd - says it has the potential to produce more than 50 million tonnes of iron ore by 2013, generating $200 million a year in royalties.

"It is therefore crucial that a new rail haulage regime that is transparent, efficient and cost-effective be brought into existence for smaller iron ore players," Dr Justin Walawski, deputy chairman of NWIOA, said.

In 2006, the state Labor government established the Pilbara Rail Access Interdepartmental Committee, but a legislated access regime has yet to be decided.

Western Australian Premier Colin Barnett has also expressed reservations against the deal, which was announced on Friday.

The mining giants announced last week they would merge their iron ore interests in the Pilbara. BHP will pay $US5.8 billion ($A7.22 billion) to Rio Tinto for a 50 per cent stake in the joint venture. Rio also launched a deeply discounted $US15.2 billion rights issue.

NWIOA also warned the joint venture might result in significant job losses in Western Australia.

"There appears to be a strong view among analysts that the BHP-Rio joint venture could lead to significant job losses in WA. This is supported by forecasts that the joint venture could generate savings for the pair of about $12 billion," Dr Walawski said.

"If so, it highlights the importance of diversifying the industry, creating new employment and development opportunities and reducing dependence on a small number of large resource companies."