IRON ore giant Fortescue Metals Group is heading to the WA Supreme Court to contest shared access of its railway infrastructure with Pilbara junior Brockman Mining.
Fortescue lodged legal action in October, through its subsidiary The Pilbara Infrastructure (TPI), for a review of the Economic Regulation Authority’s (ERA) previous determination of TPI’s floor and ceiling costs, as well as its decision to approve negotiations with Brockman for rail access.
The ERA rejected TPI’s original cost claims of $575.6 million and set a minimum annual price of $84.7 million and a maximum of $316.9 million from all line users, including Fortescue, The West Australian reported.
“We believe the ERA has made errors in its determination of the floor and ceiling costs,” Fortescue chief executive Nev 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.”
TPI called Brockman’s proposal for railway access “invalid”, claiming that Brockman was merely seeking an option to access TPI’s railway in the future, and was not presently capable of entering into a binding agreement to pay for use.
“TPI cannot be expected to subsidise third party projects that are uneconomic. The object of the code is not to provide an “option” on infrastructure,” Mr Power said.