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Chinese iron ore project budget more than triples
Published 5:07 AM, 21 Jul 2012 Last update 5:07 AM, 21 Jul 2012


China's largest investment in Australia's mining sector ? the Sino Iron project in the Pilbara ? has seen its building budget more than triple its original estimate, but the project's developer said it will continue to go ahead, with production due to begin within weeks, according to The Australian.

Citic Pacific Mining executive chairman Dongyi Hua said the final cost for the project would be about $US8 billion, or more than triple the original $US2.5 billion price tag.

The cost blowout is due to a number of factors, including lengthy delays, cost overruns, the rising Australian dollar, labour shortages and the introduction of the carbon and mining taxes.

The Australian reported that the delays and soaring cost associated with the Sino Iron project have been closely watched from Beijing, and has stoked further hesitancy amongst Chinese investors to commit to the Australian mining sector.

“In September, everything will be ready for the whole project to be running,” Citic's executive chairman Dongyi Hua said, according to The Australian. “This time we can say the investment competes with the other Australian mining companies – we are still at a good level.”