fmg - ago rail discussions, page-20

Another good article to read. Not so harmonious Matt 747 between AGO and FMG.

FMG is apparently behind push to reduce NWIOA capacity from 50 to 35mtpa because angry at AGO's plan to build rail with QR.
Also mentions that FMG is facing a battle to get it's 5th birth approved with BHP doing all it can to stop FMG getting this birth. BHP itself is weighing it's returns on it's US$20 billion outer harbour expansion which won't be built until 2018 if goes ahead.

Government to support NWI allocation. Just shows how valuable it is.
Article in today's AFR




Atlas sure of immunity from port capacity cut


Atlas Iron and Queensland Rail are jointly funding a study into building a rail line through the south-east Pilbara to link Atlas’s mines with Port Hedland, pictured. Photo: Glenn Campbell
AYESHA DE KRETSER
KEY POINTS
Atlas Iron boss Ken Brinsden says reports of a capacity cut by Port Hedland Port Authority highlights the value of Atlas’s port infrastructure.
There have been reports the PHPA wants to cut the miner’s capacity from 50m tonnes to 35m tonnes.



Atlas is an iron ore producer, developer and explorer in the Pilbara, Western Australia. Atlas is mining at its Pardoo and Wodgina Iron Ore Projects, at an annualises export rate of 6Mtpa . When combined with its Abydos and Mt Webber DSO Projects, Atlas is targeting exports at an annualised rate of 12Mtpa by December 2012.


Atlas Iron is confident the West Australian government will ensure its export allocation at Port Hedland is not squeezed as tensions simmer in the Pilbara over rail infrastructure developments.

Atlas managing director Ken Brinsden said reports that the Port Hedland Port Authority (PHPA) was considering a request to scale back capacity promised to Atlas and Brockman Resources highlighted the value of the companies’ infrastructure. But he said WA Infrastructure Minister Troy Buswell had backed the company and would ultimately decide who gets what in terms of port capacity.

“The minister’s come out pretty strongly and supported the North-West Infrastructure’s intention to develop multi-user, open access facilities,” Mr Brinsden said.

A newspaper report in The West Australian stated that the PHPA was pushing Atlas and Brockman, which negotiate jointly under the North-West Infrastructure (NWI) banner, to accept 35 million tonnes a year of capacity against the 50 million tonnes they are currently slated to receive. The cutback would free up land for an industrial park.

A spokesman for the PHPA said it was working with the Department of State Development, under WA Premier Colin Barnett, to “better understand the wider requirements of industry in terms of harbour (both inner and outer) capacity and the associated land corridors”.

The spokesman said: “As part of the continuous review process, the PHPA is engaging closely with a number of proponents and prospective port users with respect to a number of proposals, and around a broad range of issues.

“A proposal submitted by NWI to the PHPA is just one of several currently being considered.”

Mr Brinsden said he did not believe the miners would ultimately lose any of their 50 million tonnes of capacity. “It doesn’t delay us, it just demonstrates even further the value in Atlas’s port infrastructure and how keen other people are to get their hands on it,” he said.

Sources in the mining industry yesterday said Fortescue Metals Group could be behind the push to reduce Atlas’s capacity after becoming angered by Atlas’s plans to build a multi-user rail line with Queensland Rail. Atlas and QR signed a memorandum of understanding to jointly fund a study into building a rail link through the south-east ­Pilbara to link Atlas’s mines with Port Hedland.

The line would pass by Brockman’s Marillana project, as well as Atlas’s Woggagina deposit further south. The companies believe the first stage could be built as soon as 2015.

Fortescue has long lobbied for open user access agreements on ­existing rail lines operated by BHP Billiton and Rio Tinto, but has also charged juniors what they describe as exorbitant rates to access its own rail.

QR’s entry is expected to drive down prices and bolster competition among new and existing iron ore miners and could hinder Fortescue’s ability to continue to charge such rates to haul other players’ iron ore to the port.

Fortescue is understood to be ­facing a battle to get the fifth berth at its Herb Elliot Port in Port Hedland approved, with BHP Billiton believed?to be pulling out all stops to prevent it.

The battle to secure space in the increasingly congested inner harbour is being hotly contested as BHP Billiton weighs its returns on building the $US20 billion outer harbour expansion.

BHP Billiton chairman Jac Nasser and chief executive Marius Kloppers have assured investors the board is “vigorously” testing its investment return assumptions given it is not expected to be built by 2018.