ACCC ‘vindicates’ Utah Point concerns

The competition tsar has ‘validated’ junior miners’ concerns about the export berth’s potential sale.

The junior miners fear a private owner of Utah Point may ratchet up port fees without consultation.

The Australian Competition and Consumer Commission has flagged its concerns about the Western Australian government’s potential sale of the Utah Point export berth, with the watchdog calling for regulation of fees at the port under any future sale.

In a letter from ACCC chairman Rod Sims to the Parliamentary Committee studying the proposed sale of Utah Point – which is used by smaller miners in the Pilbara – the competition tsar stressed that pricing should be included as part of an “effective regulatory regime”.

“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,” Mr Sims says in the letter.

The junior miners, led by industry body the Association of Mining and Exploration Companies, fear that a private owner of Utah Point may ratchet up port fees without consultation or negotiation.

They have also been pushing for the government to make permanent the discounted fees put in place at Utah Point in recent years.

AMEC chief executive Simon Bennison said Mr Sims’ letter “vindicated” the position taken by the juniors.

“Australia’s foremost statutory body on competition matters clearly shares our view that the pricing for Utah Point must be correctly set before privatisation; that rules governing changes to that pricing post privatisation must be cast into the legislation; and that changes to that pricing must only be permitted to reflect increases and decreases in the actual costs of operating the facility,” Mr Bennison said.

“Clearly the ACCC shares concerns about failed privatisation models of the past.”

The Parliamentary Committee is expected to release its report shortly.