fmg - ago rail discussions, page-26

Rinehart, Flanagan in Roy Hill talks
Peter R. Kerr
June 11, 2012

Atlas Iron chairman David Flanagan. Photo: Bloomberg
ATLAS Iron chairman David Flanagan has begun private talks with the world's richest woman, Gina Rinehart, over a possible port-access-for-rail swap with her $9.5 billion Roy Hill mine.

Mr Flanagan, who is also investigating building a rail line with QR National, said the talks were in the early stages and involved other companies.

A host of small miners including fellow North West Infrastructure member Brockman Resources, as well as Fortescue Metals Group, have expansion plans near Roy Hill. ''It makes sense for everyone to work together and that is not something the Pilbara is well known for,'' Mr Flanagan said.


''Any relationship that was to form would need the consent of a large number of parties, and that would include the government, Port Hedland port, and the other members of the NWI alliance.

''At the end of the day there is such a wasted amount of infrastructure that is being spent on lots of redundancies and if there is a new way of looking at it everyone will make more money and the community will be better off.''

The sensitive plan, which Mr Flanagan said may co-exist with QR National's, could spark protests from rival small miners who fear being cut out of the action.

It is said to involve Atlas and its subsidiary FerrAus giving up some berth space at the NWI's proposed 50-million-tonne-per-annum South West Creek facility in Port Hedland Harbour.

In return, the fledgling mining companies would win greater access - over and above Mrs Rinehart's third-party obligations under her agreement with the state government - to Hancock Prospecting's railway from Roy Hill. This would help defray the cost of the line by increasing the amount of ore it carries. It is currently halfway through construction.

Mr Flanagan, whose unconventional thinking is credited with helping Atlas' rapid expansion but also made him a champion of small miners, could risk putting them offside with his push to deal with the big end of town. The government's preference is for junior miners to have the NWI berth space.

Brockman, which has recently been acquired by Hong Kong-based Wah Nam, declined to comment.

However, it is understood to view its share of the NWI berth as ironclad, and would demand to be involved in any development.

Some years back Hancock unsuccessfully lobbied the WA government for all port space at South West Creek. The NWI alliance and Hancock spent about $2 million looking at ways they could join forces, but that deal fell over. Hancock executive general manager, carbon steel materials, Barry Fitzgerald said the company's focus was on getting the Roy Hill rail line built before negotiating on possible access.

WEST AUSTRALIAN, with NICK EVANS