Rio slams Pilbara rail access deal

RIO Tinto says granting third party access to its Pilbara rail network in Western Australia will create inefficiencies similar to those seen on the east coast coal chain. Australia's newest iron ore exporter Fortescue is battling through the courts and with the National Competition Council for third party access to the extensive rail network owned by Rio Tinto and BHP Billiton. The rulings have so far been in Fortescue's favour. But Rio Tinto chief executive of iron ore Sam Walsh today told delegates at the Diggers and Dealers conference in Kalgoorlie that other options were available to iron ore juniors seeking transport options to move product to port. "The moment you move to multi-user infrastructure, you lose 10 per cent to 20 per cent of your efficiency ... and Australia faces an annual NPV (net present value) loss of $30 billion," Mr Walsh said. In addition to Rio Tinto's plans to produce 320 million tonnes (Mt) of iron ore a year from its Pilbara operations by 2012, he said the mining giant had a "conceptual pathway to 420 Mt". "It's an immense undertaking," he said. "Rio Tino has made substantial commitments to expand its rail network based on efficient production processes. "It's pretty hard to maintain and grow that market share without having to deal with possible regulations which will crimp our growth and lead to inefficiencies." Mr Walsh also touched on "the elephant in the room" - BHP Billiton's takeover offer - reiterating that the bid "fails to recognise the value of Rio's assets and prospects". He said Rio could maintain annual growth of 8.6 per cent through to 2022 in key areas of base metals, energy, iron ore and aluminium. Source: news.com.au