Roy Hill officials say they’re still confident Gina Rinehart’s fledgling iron ore mine in the Pilbara will be profitable, despite the short term “hiccups”.
Roy Hill Holdings director Ian Plimer told Fairfax Media officials were being “very careful with cost overruns” while development at Roy Hill continued.
Most Pilbara iron ore operations have undertaken cost-cutting measures since prices for the mineral fell below $US90 a tonne in September.
Start-up projects, like Rinehart’s Roy Hill mine and Citic Pacific’s Sino Iron development, have been particularly hurt by speculation about rising costs and diminishing profit margins.
While the iron ore price has now rebounded above $US120 a tonne, Plimer said Roy Hill workers were not focused on short term fluctuations in the market
'We might have slight hiccups in the very short term but when you're building an iron ore mine that's going to go for 60 years, the short-term variations over the space of six months, or a year, are not important,” he said.
In a strong vote of confidence in the project, Plimer told Fairfax Media Roy Hill would “go for longer than you’ll live and longer than I’ll live, and longer than those bureaucrats and politicians who are thinking short-term.
While he was bullish on the future of iron ore and Roy Hill, Plimer said the high costs and regulations associated with the Australian industry were a “real worry”.