One line of argument is that, if the merger must go ahead, the WA Government should press for guarantees for measures such as open access to rail infrastructure.
Kloppers dismissed such suggestions this week. Asked whether rail access might be offered as a "sweetener" to get approval for the merger, he said: "We do not believe the two issues are related." In fact, in a submission to the National Competition Council in 2004, the WA Government argued that BHP and Rio were required to allow third-party rail access under the terms of their original state agreements.
"To date, no access seeker has been able to negotiate satisfactory access arrangements," the report drily notes.
This proposed 'third-party' access to BHP's and Rio Tinto's rail lines is of course being pushed by a new start-up, Fortesque Metals Group. Incredibly, it seems that some people in the government believe it would be okay to effectively steal the privately owned rail systems and give their use to this new company which hasn't even produced a single tonne of iron ore. This would mean that empty trains would be travelling along the rail network preventing full trains from Rio or BHP from using their own rail lines!
The flow on effect of this is will reduce BHP and Rio's output, reduce their worldwide competitiveness, increase the price of iron ore due to an artificially imposed scarcity, and ultimately increase the price of every iron dependent product in the world (nearly everything).
It is ironic don't you think, that a government attempting to 'free' up the market, 'promote' competition and lower prices, by stealing the assets of one company and gifting them to another, will have precisely the opposite effect.
I am stunned that such attitudes still persist today.
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