Big cost blow out for Grange's Southdown iron ore project

Preliminary capital costs for Grange Resources Ltd's dual ron ore project near Albany and its Malaysian iron ore pellet operation have blown out from just over a billion dollars to more than $1.5 billion.
Grange company secretary Mark Smith told WA Business News today the near half a billion dollar price hike was "consistent with what is happening in the resources sector" and was identified during the current bankable feasibility study, due for completion by the end of March.
Most of the price increase was on the construction side of the dual project, Grange being the latest in a long line of resources companies reporting project cost blow outs due to skyrocketing construction and manpower costs.
Grange is planning production of 6.6 million tonnes of magnetite concentrate a year over 23 years from its Southdown project, 90 kilometres north east of Albany, beginning in 2008.
The project calls for the concentrate to be pumped through a slurry pipeline to the Port of Albany where it will be shipped to the Kemaman iron ore pellet facility in Malaysia, due to come on stream in June 2009.