December 22, 2016 / 5:10 AM / in 7 months

Australia's Fortescue beats competitors to secure exploration leases - documents

SYDNEY, Dec 22 (Reuters) - Fortescue Metals Group secured 42 mining and exploration leases in the world's biggest iron ore precinct last financial year ahead of competitors being notified the land was even available, parliamentary documents show.

Fortescue, the world's No. 4 iron ore miner, secured the exploration ground in the minerals-rich Pilbara by paying Western Australia's Department of Mines and Petroleum for numerous electronic information requests on land parcels.

The requests were made ahead of the free, daily public release of data that details which leases had become available earlier that day.

The tactic is the latest technique being employed to beat rivals in a competitive iron ore industry where the rights to deposits underpin future profits.

"It is irritating but, thankfully, not yet widespread," said Les Lowe, president of the Amalgamated Prospectors and Leaseholders Association of Western Australia, which represents prospectors and smaller miners.

"If it catches on there will be a problem because we won't be able to compete with those with big exploration budgets."

Reuters first confirmed the use of the tactic in August, after tracking 31 examples of Fortescue obtaining the permits hours or sometimes even just minutes before the public information release.

In response to questions raised in the Western Australian parliament, the state government has revealed Fortescue obtained a total of 42 mining and exploration permits just prior to the public release in 2015/16.

Rival miners BHP Billiton and Rio Tinto have previously said they do not engage in the practice.

"In acquiring tenements Fortescue operates in compliance with the Mining Act, and in terms of government material accesses the same information at the same time as is available to its competitors and the general public," a Fortescue spokesman said.

Western Australian mining laws are governed under "first come, first served" principles.

In an earlier age, this resulted in prospectors bursting through local mining department offices as soon as they opened to lodge paperwork ahead of a rival.

Currently, details of available leases are handed out free of charge at a specified time each afternoon.

However, companies can also make requests earlier in the day to find surrendered land at a cost of just under A$1 ($0.72) for each specific parcel of land. Fortescue would likely need to lodge several hundred requests a day to secure the most lucrative tenure, an expert in the electronic systems told Reuters.

Executive director of mineral titles at the state's mining department, Ivor Roberts, said in a written statement that the department had taken steps to make its systems "equitable for all users".

There is currently no proposal to change the system.

State lawmaker Robin Chapple, a Greens politician whose electorate covers the Pilbara, said legislative change was needed to stop the practice given it benefited companies with bigger budgets.

Reporting by Jonathan Barrett; Editing by Richard Pullin

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