Utah Point pric­ing rules in ACCC sights

Pilbara News - - News - Nick Evans

The com­pe­ti­tion watch­dog has warned the State Govern­ment it must toughen up over­sight of prices charged at Port Hed­land’s Utah Point fa­cil­ity if it wants to pri­va­tise the bulk ex­port ter­mi­nal.

The Aus­tralian Com­pe­ti­tion and Con­sumer Com­mis­sion said lighthanded reg­u­la­tion risked a buyer ramp­ing up prices at the ex­pense of Pil­bara’s mid-tier min­ers.

In a let­ter to the Leg­isla­tive Coun­cil com­mit­tee ex­am­in­ing the sale of Utah Point, the ACCC de­scribed pric­ing at the ter­mi­nal as a “key term of ac­cess” and said the leg­is­la­tion should in­clude terms al­low­ing its users to chal­lenge price rises im­posed by a new pri­vate owner.

“With­out suf­fi­cient reg­u­la­tory ar­range­ments be­ing put in place dur­ing the pri­vati­sa­tion process, the pri­va­tised owner will have the in­cen­tive and abil­ity to use its mar­ket power to raise prices above ef­fi­cient lev­els and/or re­duce ser­vice qual­ity,” the let­ter said.

The let­ter sup­ports the ar­gu­ments of mid-tier min­ers that use the fa­cil­ity, in­clud­ing At­las Iron, Min­eral Re­sources and Con­sol­i­dated Min­er­als.

They have op­posed pri­vati­sa­tion, ar­gu­ing charges at the ter­mi­nal are al­ready too high. They fear any price hikes could put their busi­nesses at risk, par­tic­u­larly if iron ore prices be­gin to fall again.

The com­mit­tee found the leg­is­la­tion en­abling the sale in­cluded “in­suf­fi­cient pro­tec­tions for ju­nior min­ers”.

Pic­ture: Port Hed­land Port

The ACCC has weighed in on the sale of the Utah Point fa­cil­ity re­gard­ing prices charged.

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