In Western Australia, plans to build new infrastructure at Pilbara are threatened to increase production by the iron company Rio Tinto. It was reported later this week that a long-term agreement between Atlas Iron, Brockman Mining and Aurizon to create a new rail line to serve the region may not be fulfilled.
The railway line was originally planned to transport 50 million tons of ore per year, and in the future it was planned to increase the capacity to 100 million tons per year, taking into account the production in South-East Pilbara.
Both companies said they would continue discussions about the potential development of the third phase of the Pilbara infrastructure, but it seems that they are just playing for time. Under the terms of the deal, Aurizon is required to operate the railway rolling stock and all the infrastructure needed to transport the ore from Marillana Brockman. Aurizon is also to arrange for the construction and operation of the Port Hedland facility. But the companies have not taken care of financial sponsors who have to put in the billions needed to build a new rail line and sweat structure.
As a result, the rail company will have to turn to Fortescue, whose model of charging for an end-to-end solution to access its rail and port infrastructure would be disadvantageous.
Aurizon and Atlas began official studies on the construction of the new Pilbara line in April last year. The first stage was completed two months ago, but when the question of including a port facility in the project arose, funding problems arose, a solution to which has not yet been found.
