Australian miner Gindalbie Metals has announced that the new investment budget for the Karara iron ore mining project in Western Australia in 2011 will total A$2.57 billion. Gindalbie also said the operating cost per metric ton of iron ore at Karara was 20 percent higher than its previous estimate. The Karara mining project is a joint venture with Chinese steel producer Anshan Iron and Steel Group.
Gindalbie said that the increase in operating cost was due to the increased labor force and raw material costs, as well as additional infrastructure investment for capacity expansion.
Proven reserves of iron ore at the mine currently exceed 2 billion mt. The annual production capacity of the mine is expected to reach 8 million mt of iron ore concentrate.