Doubts cloud Rinehart’s Roy Hill mine

Work on Gina Rinehart's Roy Hill mine in the Pilbara is progressing slower than expected and is facing a further cost blowout to the tune of $1 billion.

According to The Financial Review, the Roy Hill project will not have all its funding secured by the start of 2013 as planned, and other work delays may be costing as much as $100 million.

Earlier this year the cost of Roy Hill ballooned from $7 billion to $9.5 billion, and while analysts expect a recovery, the iron ore price remains at 2009 lows.

Nevertheless The Australian reports work on site at Roy Hill is progressing as the project prepares for construction.

Hancock Prospecting also remains confident the mine will be profitable even at lower than expected commodity prices.

According to The Australian most long-lead items for Roy Hill have already been purchased, but workers expect first production to start slightly later than the end of 2014 target.

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