ACCC backs junior iron ore push for rail access

By Sineva Toevai – www.lloydslistdcn.com.au
The Australian Competition and Consumer Commission (ACCC) granted conditional approval to Atlas Iron, Brockman Resources and Ferraus, collectively known as North West Iron Alliance, to negotiate terms such as rail access pricing with BHP Billiton, Rio Tinto and Fortescue Metals.
“The ACCC considers that collective negotiations are likely to result in some transaction costs savings compared to a situation where the producers seek to negotiate individually with the service providers,” ACCC chairman Graeme Samuel said.
The ACCC noted that participation was voluntary for both iron ore producers and the service providers.
BHP and Rio have long held fundamental objections to the sharing of their rail networks with third parties.

NWIOA proceeds to definitive feasibility level
The North West Iron Ore Alliance (NWIOA) has achieved another major milestone in its push to become the next generation of iron ore producers, with a pre-feasibility study (PFS) finding the group’s Pilbara port project able to meet the commercial objectives of its shareholders.
The study concluded that the NWIOA's proposed 50mtpa port development project at Port Hedland would be capable of meeting the shipping needs of the iron ore companies and will optimise the future development of their projects.
The study also concluded that the port infrastructure and materials handling facilities, including the berths, could be operational during the second half of 2013. The total capital cost estimate for the Project was A$2.1 billion, incorporating a two phase development program.
The report’s favourable conclusions have paved the way for the NWIOA to commence work on a definitive feasibility study, including engineering as well as an in-depth assessment of the various funding alternatives. At the same time, work will continue to secure all of the necessary approvals in support of the port’s development.
The port development will be located at South West Creek in the inner harbour of Port Hedland and comprise two berths as well as supporting infrastructure and dedicated materials unloading and stockpiling facilities.
It will provide a vital service to the NWIOA's three companies – Atlas Iron, Brockman Resources and FerrAus – ensuring they can benefit from guaranteed access to an independent, reliable and cost-effective shipping facility.

Iron ore prices to surge as mills lose leverage
The contract price for iron ore could surge by up to 80 per cent from next month amid speculation that earlier predictions of an increase half that size could be grossly under-estimated.
It comes as market analysis from Commodore Research and Consultancy shows capesize rates hit US$37,804 a day in the first week of March, a 33 per cent increase from the end of February.
The group's weekly dry bulk report also had panamax rates now averaging US$32,199 a day, up 18 per cent from a week earlier.
Negotiations are continuing for the new iron ore contract year starting April 1st but analysts believe Chinese steel mills have lost leverage because spot rates are considerably higher than the unofficially-set contract rates.
Australian iron ore with a 62 per cent iron content has been contracted at about US$60 a tonne over the last 11 months but spot rates for that grade of ore have been up around US$115.
Analysts now predict a price rise of between 40 per cent and 80 per cent.

AJM’s13th Annual Global Iron Ore & Steel Forecast Conference
March 23-25, 2010 – Sheraton Perth Hotel, WA
The next instalment of the AJM’s premier iron ore and steel event will be held at the Sheraton Perth and promises to be the biggest event yet. More than 120 executives have already secured their seats at the must-attend event of the year which attracts the highest quality range of industry players and commentators to present their views and forecasts for the year ahead.
The conference will address key pricing issues, the development of the iron ore index, production rates, new projects, as well as the challenges of infrastructure building and skilling the workforce.
The program also includes a number of social and networking opportunities for delegates to choose from.
To book your place, or to enquire about The 13th Annual Global Iron Ore & Steel Forecast Conference, contact tel: +61 (0)2 9080 4307 or email registration@informa.com.au

For more information visit: www.globalironore.com.au