Murchison Metals Ltd’s (ASX:MMX) $6 billion Oakajee Port and Rail project is facing more cost blowouts.
Yesterday the director-general of Western Australia's Department of State Development, Anne Nolan, issued the latest warnings that the cost of common-user infrastructure for Oakajee, that state and federal governments have agreed to bankroll, has climbed further.
Speaking at a parliamentary hearing in Western Australia Ms Nolan said, "It would be unrealistic not to expect that there is potential for cost increases, as all projects are experiencing cost pressures".
While Ms Nolan did not reveal the extent of the anticipated blowout, the confirmation adds to Murchison’s admission last month that the project costs are likely to rise.
Perth based-Murchison has a 50 per cent interest in the Oakajee project with the remaining interest held by Japan’s Mitsubishi Development Pty Ltd.
Murchison Metals recorded a net profit of $3.3 million in the half year ended on 31 December 2010.
