Fortescue challenges Brockman's rail access proposal in court

Fortescue Metals Group (FMG) is challenging the rail access decisions made by Western Australia’s Economic Regulation Authority (ERA) at the state’s Supreme Court.

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Iron ore junior Brockman Mining had requested for access to the rail line owned by FMG’s subsidiary The Pilbara Infrastructure (TPI) in May.

Subsequently, TPI was reported to have quoted Brockman a floor cost of A$73.4 million ($69 million) per year and a ceiling cost of A$575.6 million ($543 million) per year.

But in September, the ERA determined a floor cost of A$84.7 million ($80 million) per year and a ceiling cost of A$316.9 million ($299 million) per year.

“We believe the ERA has made errors in its determination of the floor and ceiling costs. TPI is entirely within its rights to challenge the outcome,” FMG ceo Nev Power said in a statement on Monday October 7.

TPI is seeking a declaration from the Supreme Court that Brockman’s proposal for access to the railway is invalid.

“It is TPI’s view that Brockman is merely seeking an option to access TPI’s railway at some future time and is not capable of entering into a binding agreement to use and pay for use of TPI’s railway at this time,” the FMG statement read.

Brockman had applied to transport up to 20 million tpy of hematite iron ore from its Marillana project for 20 years, starting in 2016.

“TPI cannot be expected to subsidise third party projects that are uneconomic,” Power said.

FMG said it remains a strong proponent of third-party access to infrastructure and is actively negotiating with other potential third parties that have commercially viable projects.

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