Fortescue Metals Group, a $15 billion (£7.3 billion) Australian iron ore miner, is mounting a challenge to the proposed BHP Billiton merger with Rio Tinto, demanding access to the railways operated by both companies in the iron ore-rich Pilbara region of Western Australia.

Fortescue, which has yet to produce an ounce of ore, said that it had discovered a further billion tonnes at its Solomon deposit in Pilbara.

The announcement propelled Fortescue stock 19 per cent higher and yesterday the company waded into the BHP-Rio controversy with an application to Australia’s National Competition Council, asking for third-party access to rail lines owned by Rio Tinto and BHP Billiton. Rio’s Hamersley rail line passes close to Fortescue’s enormous Solomon deposit and the newcomer is also seeking open access to BHP’s Mount Newman railway.

Fortescue has said that it will challenge the proposed takeover by BHP of Rio, arguing that the merger would be anticompetitive because it would reduce the available infrastructure in the Pilbara region. It has already won a legal battle with BHP with a ruling that its rail lines are not part of the production process and BHP is now appealing against that ruling.

The threat of litigation highlights the political contention in BHP’s mooted bid over competition issues. Marius Kloppers, its chief executive, is travelling to Beijing next week in the hope of allaying Chinese concerns that the merger would lead to unacceptable concentration in iron ore.

The two companies would account for 36 per cent of worldwide export trade due to their control of resources in Pilbara.

Andrew Forrest, Fortescue’s chief executive and founder, who controls 37 per cent, said: “Fortescue is seeking to open the tremendous synergies available in Pilbara to all Australian mining companies, as foreshadowed by the iron ore industry’s founding fathers.”

Fortescue expects ore production to begin in May, with 45 million tonnes per annum, much of its presold to Chinese steelmakers. Shares in BHP in London rose 4p yesterday to close at £16.02 on rumours that Rio would launch a retaliatory bid.

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