BCI Minerals’ first shipment from its Mardie salt and potash project in Western Australia is expected to be delayed after the company revealed it was enduring “significant” cost increases.
BCI’s salt product will likely set sail from the second half of 2025, with cost pressures compounded by a potential design restructure to comply with third-party approvals, along with ongoing COVID-induced labour pressures and recent weather events.
“BCI continues to assess further value engineering opportunities, conduct reviews of design assumptions and advance design maturity of all packages to reduce risk and partially offset the cost increases,” the company said in a statement.
“The company will confirm the projected net impact of market conditions, design changes, remaining approvals and cost saving initiatives when the reviews have been sufficiently advanced to produce a reliable cost estimate.”
BCI has current cash reserves of $209 million plus other financial assets, including the $100m convertible notes issued in December 2021, which will enable it to continue construction work according to the new schedule for the remainder of the current financial year.
“Once a reliable cost estimate has been established, BCI will discuss funding solutions (which may include asset sales) with shareholders and lenders,” the company said.
BCI is developing the potential Tier 1 project on the Pilbara coast of WA, with Mardie designed to produce about 5.3 million tonnes per annum (tpa) of high-purity salt and about 140,000 tpa of sulphate of potash (SOP) via solar evaporation of seawater.
BCI receives quarterly royalty earnings from Iron Valley, an iron ore mine operated by Mineral Resources. The company’s other assets include substantial shareholdings in Agrimin and Highfield Resources, and potential royalties and/or deferred payments from iron ore projects at Koodaideri South, Bungaroo South, Kumina and Nullagine.