A mineral producer predicts at least one new mining development will cost significantly more due to a highly contagious disease.
Fortescue Metals Group (FMG) recently blamed coronavirus (COVID-19) for dramatically lifting costs associated with its Iron Bridge Magnetite Project, 145km south of Port Hedland.
FMG flagged a potential US$1.2 billion (A$1.68B) blowout in construction expenditure up to US$3.8B (A$5.3B). The figure is 46 per cent higher than the original US$2.6B (A$3.6B) budget.
“COVID-19 related labour constraints including isolation and absenteeism together with a tight labour market have contributed to workforce levels being significantly below the project workforce plan for the March  quarter,” the employer said in its latest quarterly production report.
“Other factors include ongoing supply chain issues, higher installation and construction costs as well as escalation in logistics and shipping costs – which have been further exacerbated by the recent lockdowns in China.”
The remarks came months after the proponent earlier lifted project capital expenditure to as much as US$3.5B (A$4.9B).
The project lately unloaded five module ships at Port Hedland, bringing a total of 14 vessels. A further seven module ships are on the way. Earthworks at the nearby concentrate handling facility are also complete.
Mechanically installing primary crusher A is well underway, while work is continuing on the concentrate, return and raw water pipelines.