30 Dec 2002

Cost overruns force further delay in construction of New Caledonian nickel mine

6:35 am on 30 December 2002

A Canadian newspaper reports that work on the huge Goro nickel mining project in New Caledonia's Southern Province has been put on hold for at least a year.

The Toronto Globe and Mail quotes Scott Hand, the chief executive of Inco, the company building the mine, as saying there is to be a major review of the project after it was found that engineering and construction costs could be as much as 650 million US dollars higher than projected.

Mr Hand says some of the estimates from local companies were much higher than expected and the company will consider doing more of the work itself and relying less on local companies.

The one point 4 billion US dollar project was expected to begin production in 2005 and be running at full capacity in 2006.

Mr Hand says decisions on the mine's future will not be decided until late next year, at the earliest.