Nick Sas, The West Australian
August 17, 2012
CITIC Pacific's delay-plagued $US8 billion ($7.6 billion) Sino Iron venture in the Pilbara will miss yet another deadline after the Chinese company revealed the magnetite project would not enter production at the end of this month as promised, but in three months' time.
The announcement, alongside the Hong Kong-listed CITIC's half-yearly result, means Clive Palmer will have to wait longer to receive the first of a multi-million royalty cheque due to him once Sino Iron begins mining ore buried across his Cape Preston tenements.
It also adds to the drama surrounding China's biggest resources investment in Australia.
Sino Iron was originally budgeted at $US2.5 billion but the cost increased to $US7.1 billion, and as high as $US8 billion, as CITIC and its engineering, procurement and construction contractor China Metallurgical Group Corporation (MCC) struggled to deal with design issues, cultural adjustment and WA's inflationary cost environment.
The magnetite project - claimed by CITIC as the world's biggest - was earmarked to be in production by the end of 2011, but construction delays forced the project to miss its already revised August 31 deadline.
CITIC, which has its Pacific mining arm headquarters in Perth, yesterday said commissioning was now planned for October, with trial production expected in November.
In the half-yearly results, CITIC again blamed the delay on MCC because completion of the processing area, "which remains the primary cause of the delay", was the contractor's responsibility.
"The delay has obviously created a lot of pressure and we're very unhappy with it," CITIC Pacific managing director Zhang Jijing told investors at the half-year results announcement yesterday in Hong Kong.
Mr Jijing also cited "rising labour costs" and "strict" regulations as another factor in the delay.
Along with the Chinese Government, the delay will no doubt cause further frustration to Mr Palmer, who is due to receive millions from Sino Iron when the mine enters production after selling the project's tenements in 2006.
August 17, 2012
CITIC Pacific's delay-plagued $US8 billion ($7.6 billion) Sino Iron venture in the Pilbara will miss yet another deadline after the Chinese company revealed the magnetite project would not enter production at the end of this month as promised, but in three months' time.
The announcement, alongside the Hong Kong-listed CITIC's half-yearly result, means Clive Palmer will have to wait longer to receive the first of a multi-million royalty cheque due to him once Sino Iron begins mining ore buried across his Cape Preston tenements.
It also adds to the drama surrounding China's biggest resources investment in Australia.
Sino Iron was originally budgeted at $US2.5 billion but the cost increased to $US7.1 billion, and as high as $US8 billion, as CITIC and its engineering, procurement and construction contractor China Metallurgical Group Corporation (MCC) struggled to deal with design issues, cultural adjustment and WA's inflationary cost environment.
The magnetite project - claimed by CITIC as the world's biggest - was earmarked to be in production by the end of 2011, but construction delays forced the project to miss its already revised August 31 deadline.
CITIC, which has its Pacific mining arm headquarters in Perth, yesterday said commissioning was now planned for October, with trial production expected in November.
In the half-yearly results, CITIC again blamed the delay on MCC because completion of the processing area, "which remains the primary cause of the delay", was the contractor's responsibility.
"The delay has obviously created a lot of pressure and we're very unhappy with it," CITIC Pacific managing director Zhang Jijing told investors at the half-year results announcement yesterday in Hong Kong.
Mr Jijing also cited "rising labour costs" and "strict" regulations as another factor in the delay.
Along with the Chinese Government, the delay will no doubt cause further frustration to Mr Palmer, who is due to receive millions from Sino Iron when the mine enters production after selling the project's tenements in 2006.
No comments:
Post a Comment