BHP nears finalisation of port and rail deal with 2 junior miners in Pilbara region
Global mining giant BHP Billiton Ltd may soon be opening up its port and rail network as it confirmed on Thursday that a rail haulage cooperation and port access agreement with junior miner Atlas Iron Ltd in the Pilbara region of Western Australia is being discussed and could be finalised very soon.
Once the deal pushes through, analysts said that it would be the first time that BHP Billiton's proprietary rail network would be accessed by a third party user since the hauling system was co-established with Rio Tinto Ltd over the 30-year period.
The Pilbara iron ore rail network also saw construction contributions from Fortescue Metals Group since 2006 and currently ships up to 34 percent of the world's seaborne iron ore materials.
A news article published by The Australian on Thursday had indicated that BHP Billiton and Atlas Iron struck a memorandum of understanding that would bring about an integrated transport solution at Port Hedland in eastern Pilbara, where BHP has been the dominant producer and exporter of iron ore.
Analysts said that a breakthrough on the brewing deal should offer a lasting solution that could considerably ease down the iron ore export bottleneck currently plaguing the region.
A joint statement issued by the two companies showed that "Atlas Iron and BHP Billiton Iron Ore have agreed to consider point-to-point rail haulage on BHP Billiton's declared Goldsworthy line to the junction of BHP Billiton's Newman rail line."
Also, The Australian Financial Review carried reports that along with Atlas Iron, Brockman Resources Ltd is also in a deep discussion with BHP Billiton for a similar access agreement at Mt Newman.
Both junior miners are members of North West Iron Ore Alliance (NWIOA), which contributes up to 50 million tonnes of iron ore capacity each year at Port Hedland.
The news broke following BHP Billiton's recent investment commitment of up to $US635 that it said was meant to accelerate its development projects in the Pilbara region and part of which is a $US570 million allocation that would expand the company's port, rail and mine facilities on its Jimblebar mining site.