20/02/2008 - 22:00

Watch for higher construction costs

20/02/2008 - 22:00

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The increased iron ore price is great news for WA exporters but it does have a downside. It will quickly flow back in the form of higher steel prices, which will make future expansion projects more expensive.

The increased iron ore price is great news for WA exporters but it does have a downside.

It will quickly flow back in the form of higher steel prices, which will make future expansion projects more expensive.

The prospect of higher steel prices will add to the cost pressures facing construction projects in WA.

Gold miner Newmont recently reported a 50 per cent increase in development costs at its jointly owned Boddington gold project, adding to a string of projects suffering cost blowouts.

Added to that is the ongoing challenge posed by the state’s labour shortage.

Portable accommodation manufacturer Fleetwood Corpor-ation commented this week that: “the cost and availability of labour continues to be a significant challenge to the group”.

It is trying to tackle the problem by increasing its use of automation and recruiting from previously untapped labour pools.

Other companies will be interested to know where they can find these untapped labour pools, because many people are convinced they don’t exist.

Iron ore miner Mount Gibson Iron also highlighted the significant challenges posed by the limited supply of skilled operating and maintenance employees.

“A shortage of appropriately qualified labour and the increase in labour and consumable costs and skilled labour shortages within the industry continues to represent a risk to sustained operational performance,” the directors said.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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