FMG lay down the law on western tracks
The Fortesque Metals Group (FMG) is fighting to hold onto tight control of its railways, challenging the regulator that sets the price for others.
Fortescue have taken their challenge to the supreme court, after Australia's Economic Regulation Authority (ERA) laid out what prices Fortescue could charge for third-party rail users.
The minerals giant must allow others to use its tracks and ports following an agreement with the WA state government in 2004.
Fortescue is moving to block Brockman Resources from using their line in the Pilbara for a 20 million tonne allocation. FMG say it would block up the lines for everybody else, and they would like to charge extra.
Fortescue chief executive Nev Power says the separate company that runs the railway - The Pilbara Infrastructure (TPI) – should be allowed to get as much as it can.
“We believe the ERA has made errors in its determination of the floor and ceiling costs,” Mr Power said.
“TPI is entirely within its rights to challenge the outcome and has a duty to shareholders to pursue a fair and reasonable return on its world class infrastructure.”
Mr Power claims the Brockman group made the application to use their tracks without any actual ore to move, but rather as a plan for the future. He says it is invalid and does not comply with regulatory codes.
“TPI cannot be expected to subsidise third party projects that are uneconomic,” he said.
Reports say Fortescue Metals Group have applied for a judicial review of the ERA ruling.