02 March 2007
Key Points:
The court held that that even if the railway line is an integral and essential part of an overall process used to produce an exportable iron ore product, this does not make the use of the railway line the use of a production process itself.
In 1999 Justice Kenny of the Federal Court held that the rail line used by Rio Tinto's subsidiary, Hamersley Iron, was exempt from the access regime contained in Part IIIA of the Trade Practices Act with the result that third parties had no right to negotiate access to run their own trains on that rail line. The exemption arose because, according to Her Honour, access to the rail line involved the use of the production process which Hamersley undertook in producing its export grade iron ore. An appeal was lodged in that matter to the Full Court of the Federal Court but it was never heard because, shortly before the hearing of the appeal, the access application which had been made by Robe River Iron Associates was withdrawn.
Five years later, Fortescue Metals Group made an access application to the Mt Newman and Goldsworthy rail lines operated by BHPBillliton Iron Ore. BHPBilliton Iron Ore sought to make the same arguments that Hamersley had successfully made before. This time, however, before a different judge of the Federal Court, those arguments were unsuccessful. Just before Christmas last year Justice Middleton delivered his decision and found that the production process does not apply to the Mt Newman or Goldsworthy rail lines. He made that finding not because of any factual differences in the two cases but, because, in his view, the Hamersley decision was wrongly decided. His Honour found that a production process is the creation or making of a product or the transforming of one thing into another and that even if the railway line is an integral and essential part of an overall process used by BHPBilliton to produce an exportable iron ore product, this does not make the use of the railway line the use of a production process itself. BHPBilliton Iron Ore has appealed the decision and the appeal to the Full Court of the Federal Court is to be heard in May.
For further information, please contact Linda Evans.
