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The $ 900m price tag for Fortescue underscores the decline in miners

Fortescue Metals Group has revealed a $ 900m jump in high metal prices, pointing out how low labor costs and high commodity prices are affecting Australian mining sectors.

The company, one of the world’s largest steel producers, said on Friday that the Iron Bridge mine would cost $ 3.3-3.5bn to grow, due to labor costs, inflation and the Australian dollar, which also caused months of delays. six.

The disclosure, which is a review of the project in the Western Australia area of ​​Pilbara, followed departure of Fortescue’s three senior executives in February. This is the second time the Iron Bridge has exploded, with Fortescue estimating that in February the project will reach $ 3bn, from an initial estimate of $ 2.6bn in 2019. Fortescue is leading December 2022 in making the first iron ore mine.

The demand for labor in Western Australia is hot as a result of rising steel prices, which has prompted financial groups in Rio Tinto, BHP, Fortescue and small-scale manufacturers to invest in new mines.

Elizabeth Gains, Fortescue’s chief of staff, said the labor crisis was a major challenge for the team members working on the development of Iron Bridge. Some of these contractors are concerned about the difficulties in relocating people to Australia due to coronavirus restriction, he added.

Fortescue’s jump in the stock market recently recorded mining warnings about declining labor costs due to iron ore and the high cost associated with the closure of Australian and international borders due to the Covid-19.

This week, BHP was warned about the “lack of complex skills” for sailors in Pilbara, a remote area that produces a large amount of iron ore in Australia. The world’s largest mine is said to be recruiting 200 new drivers and actively following the training of staff in management and qualifications.

Last month, the Mineral Resources mine lowered its annual steel exports by 13% due to a reduction in motorists triggered by international closures.

Employment in the Western Australian economy quantity by 5% to a record 135,001 last year, making a profit of $ 19bn each. This represents an annual increase in the mining and oil industry from the end of the census in 2012-2013, according to Western Australian government figures.

The unemployment rate is 4.8% in Western Australia.

“Pilbara is an Australian power right now, largely because of the global demand for our steel,” said Michael Stutley, a co-founder at Kingston Reid, a law firm that works. “Skills are at an all-time high. If nothing is done, then [it] it will disrupt the economy. ”

Stutley said Canberra needed to launch “working bubbles” with other countries to help the talented enter Australia and support the financial sector.

The Australian government’s insistence that international borders will not be reopened until mid-2022.

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