Sorry I didn't realise you meant $200m cost over-run. I have been around a couple of projects and an extra. $200 m could be on the cards in the current enviroment. I think we have almost every Crane in aust headed up here to Karratha at the moment.Below is a report from 24th august.
EXPLOSIVES maker Dyno Nobel says its ammonium nitrate plant project in Moranbah, in Queensland, will cost significantly more than the original $520 million estimate and will start production later than anticipated.
Ammonium nitrate is a key component of explosives.
Dyno Nobel yesterday booked a first-half net profit of $US44.04 million ($A54.54 million) — down 1.5 per cent.
Net profit before one-off items was up 22.2 per cent to $US48.4 million.
Chief executive Peter Richards said the new ammonium nitrate plant had been a challenge.
Engineering delays, higher management and labour costs, and significant additional contingencies had pushed up overall estimated costs.
"We probably see that as the only blight in terms of the performance of the business to date," Mr Richards said.
"But having said that … it still presents significant benefits for the group in the longer term."
The company said it would not be practical to estimate the likely final cost of the Moranbah project until the engineering design and construction contracts were finalised.
"However, it is now evident this will be significantly higher than the previous estimate, which was in the vicinity of $520 million."
The plant in Moranbah, in the Bowen Basin, which Dyno wants to build to meet strong demand from key global mining companies in Australia, will be able to produce 330,000 tonnes of ammonium nitrate a year.
The project is now expected to be completed in the first half of 2009.
Dyno had previously expected to commission the plant in the fourth quarter of next year. Dyno is also re-examining the scope and schedule of its ammonium nitrate expansion project in Cheyenne, in Wyoming, as a result of changing market conditions.
Dyno Nobel said its outlook remained positive.
"The outlook for Dyno Nobel remains positive despite the downturn in the housing market and subdued east coast coal sector in the United States," the company said.
Mr Richards said the company had begun an aggressive acquisition strategy over the past 12 months, buying 13 companies. The company declared an interim dividend of 2.8¢ a share. Dyno shares fell 16¢ to $1.88.
AAP
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