Oct 29 2008
Rio Tinto is very disappointed by the Treasurer’s decision to allow third-party access to its infrastructure in the Pilbara.
Far from producing a clear benefit to Australia, the decision brings a significant risk of revenue loss to the national economy, resulting in a present-value cost to GDP of up to $30 billion. This is a cost the nation can ill-afford at this time of economic uncertainty.
Rio Tinto operates a fully integrated, highly complex system, increasingly using unique technology. A 1,300-kilometre rail network links 11 mines to three ports, where iron ore is blended to produce several products for sale to export markets.
Allowing third-parties access will impede this efficiency and reduce the tonnage that can be pushed through this system.
If the Pilbara railways become multi-user, future expansions will inevitably be more complex and difficult, and therefore delayed. We have already seen this occur on the east coast. This decision will reduce total tonnage exported using the system - not increase it – and therefore it is difficult to see how it can be in the national interest.
Rio Tinto is considering its options, but is likely to take the matter to the Australian Competition Tribunal for a review of the decision.