The Australian Competition and Consumer Commission has proposed to grant authorisation* to agreements involving BHP Billiton Minerals Pty Ltd to form a joint venture with four Chinese steel manufacturers for the mining and export of iron ore, ACCC Chairman, Mr Graeme Samuel, said today.
The agreements relate to the establishment of the Wheelarra Joint Venture for the mining, processing and transport of iron ore from the Jimblebar site in north Western Australia which will be sold to purchasers in China. Iron ore will be transported along the Mount Newman railway line to Port Hedland where it then will be exported. BHP Billiton Iron Ore Pty Ltd is a participant in a joint venture which owns the Mount Newman railway line.
With expectations that the demand for steel in China will continue to be strong, the joint venture hopes to develop long term export relationships with purchasers in China.
The Wheelarra Joint Venture will terminate upon the earlier of the expiration of the period of 25 years from commencement of the joint venture or the extraction of 175 million tonnes of iron ore and otherwise upon the occurrence of certain specified termination events.
"The ACCC proposes to grant authorisation for the life of the joint venture", Mr Samuel said.
During consultations, a concern was raised that third parties were experiencing ongoing issues in seeking access to the Mount Newman railway line and that granting authorisation to the arrangements under the WJV would result in lost opportunities to promote competition.
The ACCC considered whether any railway access implications would arise in authorising the WJV.
"The ACCC's proposal to grant authorisation to this joint venture does not prevent parties from seeking access to the Mount Newman railway line and this decision should not be seen as making any comment on the rail access issue", Mr Samuel said.
The ACCC will invite interested parties to provide a written submission, or request a conference with the ACCC, in response to the draft determination.
More information regarding the application and a copy of the Draft Determination are available by following the Authorising anti-competitive conduct and Authorisations links on the ACCC's website.