Brockman boss lashes Forrest on 'open rail access' claimANDREW...

Brockman boss lashes Forrest on 'open rail access' claim

ANDREW BURRELL AND PAUL GARVEY
THE AUSTRALIAN
SEPTEMBER 16, 2013 12:00AM

Russell Tipper says Brockman negotiated in good faith with Fortescue for four years before approaching the ERA in its effort to get rail access. Picture: Colin Murty Source: TheAustralian

Source: TheAustralian
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BROCKMAN Mining chief executive Russell Tipper has lashed out at Fortescue Metals Group chairman Andrew Forrest's refusal to provide third-party rail access, accusing the billionaire of making misleading claims in an attempt to fend off junior miners.

Mr Forrest has promised for the past decade that Fortescue's Pilbara rail network would be "open access" and that his company would help scores of other projects with otherwise stranded deposits to transport their ore.

But the magnate said last month that Fortescue would only open its Pilbara rail network to companies prepared to hold direct negotiations rather than those that sought access through Western Australia's Economic Regulation Authority.

"What we won't do is waste those other companies' chances of getting their commercial projects up . . . and waste capacity helping projects who don't bother negotiating and go straight to the ERA," Mr Forrest said.

Mr Tipper said such comments ignored the fact that Brockman had negotiated in good faith with Fortescue for four years before approaching the ERA in May this year to continue negotiations under the state's railways access code.

"I thought four years of negotiations would have been a fair go of trying to reach a commercial accommodation without having to resort to the access process," he told The Australian.

Mr Tipper also took issue with claims by Mr Forrest and Fortescue chief executive Nev Power that the company had a proud history of providing third-party rail access to other miners.

He said Fortescue's agreement to carry ore on behalf of BC Iron, its joint venture partner in the Nullagine iron ore project, constituted a haulage deal rather than a third-party access agreement.

"They are forever talking about how proud they are that they actually provide other parties access to their line," he said. "In fact they don't. A haulage agreement does not constitute access."

ERA chairman Lyndon Rowe backed Mr Tipper's assessment, saying Fortescue's infrastructure arm, The Pilbara Infrastructure, had not carried any third-party ore. "When they say they're providing third-party access, what they're really saying is they're providing haulage contracts for other miners," Mr Rowe said.

"They're not providing third-party access. Third-party access refers to the ability of other parties being able to run their trains on the TPI railway line."

Fortescue claims it is not obliged to negotiate over rail access because Brockman does not have the managerial or financial capabilities to go ahead with its proposed development.

On Thursday, ERA significantly watered down the price Fortescue had hoped to charge for access to its Pilbara rail network.

The ERA said the total costs Fortescue could apply to its rail ranged from $84.7 million to $316.9m. Fortescue had previously argued that the cost would range from $73m to $576m.

Mr Tipper said he was not surprised by the ERA's assessment of floor and ceiling prices.

In response, Fortescue said TPI was not required to start negotiations unless Brockman could show it had the financial resources and the managerial capability for its proposed development.

Mr Tipper said he was confident Brockman could prove this, but added that an arbitrator may need to be appointed to resolve the dispute. "Until those matters are resolved they are technically able to not engage in negotiations," he said.

"We are preparing more substantive submissions and we will put those more fulsome submissions to TPI in due course.

"If after that we remain in dispute over these issues then either party has the right to go to the ERA and ask them to appoint a commercial arbitrator."

http://www.theaustralian.com.au/business/mining-energy/brockman-boss-lashes-forrest-on-open-rail-access-claim/story-e6frg9df-1226719597642