Mining giants BHP Billiton and Rio Tinto are "dogs in a manger" afraid of competition in the Pilbara, former Howard government minister Ian Campbell says after being appointed the new chairman of the North West Iron Ore Alliance.
Mr Campbell led several portfolios during the Howard years, including Environment, Local Government and Human Services.
The Alliance has been seeking access to the rail lines used by BHP Billiton and Rio Tinto so they can take ore to a proposed port to be shipped overseas.
"It is to the benefit of the WA taxpayer that there is more iron ore shipped out of Australia because they benefit from jobs and from royalties," Mr Campbell told AAP.
"In the meantime, BHP and Rio are being dogs in a manger and sitting on this infrastructure to stop other people getting use of it because they don't want competition."
He said in the past the mining giants had held up negotiations for access to the rail lines for years.
"They hope if they delay enough the projects will fall over," Mr Campbell said.
The four companies that are part of the alliance includes Atlas Iron, BC Iron, Brockman Resources and FerrAus.
They claim that combined production from their iron ore mines could generate up to $200 million per year in state government royalties.
The companies have been given the green light to build a $2 billion port at Port Hedland, due to be finished in 2013 if they secure the rail access.
Mr Campbell said the Western Australian government had effectively paid BHP Billiton, the world's largest resources company, and Rio Tinto, the second biggest iron ore producer, many times over for the rail lines.
"They have effectively been receiving billions of dollars in subsidies over the last few decades," he said.
He called on the WA government to ensure a proposed $US116 billion tie-up of BHP Billiton and Rio Tinto's Pilbara iron ore operations be allowed only if they share their rail access with smaller iron ore producers.
"It should be something that is put in stone before the government goes to the next stage," Mr Campbell said.
"We want to try and wrap this up before Christmas if we can."
A spokesman for Fortescue Metals Group, which has separately been campaigning for rail access, backed the moves by the Alliance.
Fortescue is currently awaiting the outcome of a decision by the Australian Competition Tribunal in relation to the issue, although a final determination may be years off.
In response to Mr Campbell's comments a BHP Billiton spokeswoman directed AAP to a recent statement from company executive Ian Ashby, who said they had no excess capacity to allow third-party rail access.
"Our obligation is to our shareholders and our facilities are running flat out," Mr Ashby said last month.
A Rio Tinto spokesman later said the company needed the capacity of its rail lines.
In apparent reference to the endemic congestion in coal exports from Newcastle he said "significant problems" appeared to be resurfacing at multi-user facilities on Australia's east coast.
"As our recent results have demonstrated, we are producing iron ore in record quantities, and we are shipping every tonne we can produce," the spokesman said.
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