PERTH (miningweekly.com) – Potash developer BCI Minerals has flagged cost increases at its Mardie salt and potash project, in the Pilbara, days after starting construction.
BCI, which broke ground on March 25 at Mardie, on Thursday said that the company expected the current inflationary pressures on construction inputs such as fuel, labour, transport and equipment would lead to increased capital cost for particularly the civil component of the project.
“Cost pressures are evident across the mining and construction sectors in Western Australia. We are closely monitoring and managing our contracts and are reviewing the inflationary impact on the total Mardie capital cost,” said MD Alwyn Vorster.
“We are also reviewing our long-term commodity price assumptions and will advise the market when this work is complete. It is our expectation that even with these increasing cost pressures, the Mardie project financial returns over multiple decades will remain attractive.”
An updated estimate of total project capital cost and projected financial returns is expected to be released before the end of June.
Previous estimates have placed the project cost at A$913-million.
Mardie is expected to produce 5.35-million tonnes a year of salt and 140 000 t/y sulphate of potash (SoP), over a projected mine life of at least 60 years. First salt sales are targeted for the fourth quarter of 2024, and first SoP sales by the first quarter of 2026.