The cost of Citic Pacific's Sino Iron project in the Pilbara has ballooned to $US8 billion, more than triple the original budget.
The Australian reports while labour shortages and delays had contributed to the blowout Citic said the mine was set to start production in September.
Citic officials also told The Australian the project's costs were competitive with other mining operations.
The Sino project is set to be the largest magnetite development in the world, producing around 28 million tonnes of concentrate and pellets a year.
Mining magnate Clive Palmer is also set to receive hundreds of dollars of royalties from the project after Citic purchased the original tenements from him in 2006.
Earlier this year Redline Contracting said it planned to sue Sino's lead contractor, MCC, after it had work cancelled.
Workers at the project also downed tools in February following a CFMEU meeting, and expressed concerns over work conditions and the payment of Chinese workers on site.