Higher Mardie costs likely

BCI Minerals is anticipating cost hikes at the Mardie salt and potash project, citing inflationary pressures on fuel, labour and transport.

The potash aspirant, which kicked off construction at the $1.2 billion project earlier this month, notified the ASX this morning that elevated construction inputs were likely to be reflected in the civil component of the build.

While an exact figure was not disclosed, BCI said an updated estimate of total project capital costs and projected financial returns would be released before the end of the financial year.

The company highlighted however that salt and sulphate of potash prices had increased. 

BCI also confirmed that SRG Global would pick up construction for walls and pond levees after initial contractor WBHO Infrastructure was placed into administration in February this year.

SRG completed its acquisition of the business at the end of March.

BCI managing director Alwyn Vorster said cost pressures were evident across mining and construction sectors in Western Australia.

“We are closely monitoring and managing our contracts and are reviewing the inflationary impact on the total Mardie capital cost,” Mr Vorster said in a statement.

Mr Vorster said BCI was closely monitoring its contracts and reviewing inflationary impacts on the project.

“We are also reviewing our long-term commodity price assumptions and will advise the market when this work is complete.”

“It is our expectation that even with these increasing cost pressures, the Mardie Project financial returns over multiple decades will remain attractive.”

BCI shares closed the day down 6.32 per cent to trade at 44 cents.