OZ Minerals is considering delaying its $1.1 billion West Musgrave nickel and copper project because of worker shortages, the risk of pandemic restrictions and inflationary pressures.
OZ accepted an 11 per cent increase in the construction cost of West Musgrave in 2020 when it decided to increase the size of the mine and adopt equipment that would enable it toIn many cases those tweaks created value by lowering the long-term operating costs at West Musgrave by more than the increased upfront spend.
Preservation of Indigenous cultural heritage has also become a higher priority for mining companies since Rio destroyed prized cultural heritage at Juukan Gorge in May 2020. “Our teams have spent a lot of time on country, the community has indicated their support for the project, and we are going through the final stages of the land access agreement, so I suspect that will be, all going well, done before we actually take a final investment decision,” he said.
But Mr Peker said investors were likely to view a delay at West Musgrave as “a negative” for the company.West Musgrave was discovered by Western Mining Corporation in 2000.Western Mining Corporation was later acquired by BHP, with BHP selling the West Musgrave projects to Cassini Resources in 2014 for just $250.000 and the promise of future milestone payments if the West Musgrave discoveries came into production.
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