Rinehart’s Hancock weighs $3.3 billion iron ore mine project
Hancock acquired a 51% interest in the Mt Bevan project from Legacy Iron Ore Ltd. and Hawthorn Resources.
Rising labor and construction costs as well as declines in commodities prices have cast doubt on AUD$100 billion in mining and energy projects in Australia.
According to an analysis of scheduled projects conducted by the Australian Financial Review over a dozen major projects at earlier stages of development are set for either delay or cancellation.
The biggest projects on the list include BHP Billiton’s (ASX:BHP) Olympic Dam uranium mine in South Australia, with an estimated cost of $20 billion, Shell (NYSE:RDS.A) and PetroChina’s (NYSE:PTR) Arrow Energy LNG project in Queensland, also worth an estimated $20 billion, and Woodside Petroleum’s (ASX:WPL) Browse LNG project in Western Australia, with an expected price tag of $40 billion.
A slew of major coal projects still in the pipeline will also be delayed, including the $9 billion Abbot Point coal terminal expansion and Port Waratah Coal Service’s $5 billion Kooragang Island T4 coal expansion.
The Australian mining boom has recently been hampered by declining commodities’ prices, with the Reserve Bank of Australia’s monthly commodity price index falling by 18.5% year on year in Australia dollar terms in August for its biggest decline since the Great Financial Crisis.
Declines were led by iron ore and coking coal, which serve as the Australian resource sector’s key pair of stalwart exports to China.
Prices for iron ore have plunged 50% in roughly the past year to below USD$90, hitting a fresh three-year low and falling well below the key USD$120 threshold outlined by most analysts.
Speculation over a decline in the Australian resources sector has been rife in the Australian media over the past two weeks in the wake of resource minister Martin Ferguson’s impromptu announcement of an end to the mining boom during an interview with ABC news.
