ACCC backs iron ore juniors on rail deal

Australia's competition watchdog has backed a group of junior iron ore producers
that are seeking to collectively bargain for rail access in Western Australia's
Pilbara region.
The North West Iron Ore Alliance should be allowed to jointly negotiate terms and
conditions of rail access, including price, the Australian Competition and Consumer
Commission (ACCC) said in a draft determination.
The alliance comprises Atlas Iron Ltd, Brockman Resources Ltd and FerrAus Ltd and
they have been seeking to access the railway lines in the Pilbara owned by larger
mining companies.
Although the Pilbara is rich in iron ore, some producers have had difficulties
transporting the resources over the huge distances to port for shipping to overseas
steel mills.
"The ACCC considers that collective negotiations are likely to result in some
transaction costs savings compared to a situation where the producers seek to
negotiate individually with the service providers," ACCC chairman Graeme Samuel said
in a statement.
BHP Billiton Ltd, Rio Tinto Ltd and Fortescue Metals Group Ltd all have their own
rail lines.
Fortescue, which also is seeking greater rail access, has been supportive of the
alliance members' efforts.
Rio Tinto and BHP Billiton have resisted calls to open up access to their rail
lines, saying there was no excess capacity to allow third-party rail access.
The alliance has claimed that combined production from their iron ore mines could
generate up to $200 million a year in state government royalties if they had access
to rail lines.