problems nt news

Business
Browns project pushed to 2008
By ALISON BEVEGE
400 words
5 September 2007
Northern Territory News/Sunday Territorian
1 -
20
English
Copyright 2007 News Ltd. All Rights Reserved

Mine costs soar

ENGINEERING and construction problems have caused another setback to the $100 million Browns Oxide project, with commissioning costs to soar by up to 30 per cent.

Compass Resources announced that commissioning of the mine, 100km south of Darwin, would be delayed until the first quarter of 2008.

It had been scheduled to begin production in the fourth quarter of this year.

This is the second delay to hit the project, which was once expected to begin in mid-2007. The company announced in March that power supply delays had pushed it out until October.

Compass Resources managing director Richard Swann said the company was assessing the details of the new problem and would give a more accurate assessment of them when they had gone through the complete review.

Mr Swann would not give a timeframe on when that might be.

"We discovered some deficiencies, which meant we've had to rework some parts of construction," he said.

Mr Swann said the new delays were not caused by anything to do with the processing tanks, power supply, logistics or supply of raw materials to the site.

"It's to do with engineering and construction," he said.

Mr Swann said the skills shortage had also contributed to the situation.

The company said the cost of commissioning the plant would rise by up to 30 per cent. Increases in the $83 million processing plant cost would be paid for by Compass Resources, but increases in pre-production operating costs are to be shared equally with joint venture partner Hunan Non-Ferrous Metals.

With a mine life of 10 years, the Oxides project is expected to produce 1.3 million tonnes per year of compounds of copper, cobalt and nickel and employ 150 Territorians.

Some silver lining for the miner was to be had from drilling results, which showed a solid result at the company's nearby metal sulphides project.

The results showed the lead ore body extended deeper than previously expected.

The drilling revealed intercepts of 55m at 5.1 per cent lead starting at a depth of 478m.

"It is a good width (of ore) to have at such a deep level," Mr Swann said.

"It's very significant."

Mr Swann said the company aimed to start constructing the metal sulphides mine in 2009.

[NTN_T-20070905-1-020-888924 ]

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