High costs, labor shortages hampering mining: Teck

Thu Feb 21, 2008 3:16pm EST
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TORONTO (Reuters) - Base metals mining projects could continue to face delays or cancellation from higher costs and a lack of available personnel, Teck Cominco's chief executive said on Thursday.

The Canadian miner has had first-hand experience with the issue, having put a halt to its joint venture Galore Creek copper-gold project in British Columbia last year, and recently saying it may decide not to buy into the Petaquilla copper project in Panama due to a doubling of construction costs.

Speaking at an investment conference in the ski resort town of Whistler, British Columbia, CEO Don Lindsay said the industry in general has been having trouble getting workers.

"Industry-wide, I do think it sends a bit of signal that some of these projects just won't be build or won't be built as quickly as people are anticipating," he said.

"So if demand continues, in China in particular, then supply will have trouble keeping up."

Teck has said it is will look for ways to cut costs at Petaquilla before a March 31 deadline to decide whether to fund 52 percent of the construction in exchange for a 26 percent stake in the project.

"Our confidence in being able to build it is quite high," said Lindsay.

Regarding Galore Creek, Teck and joint venture partner NovaGold have launched a review to find a cheaper way to develop the project.

Lindsay said one option for project funding would be to forward sell, or hedge, a portion of Galore's gold production.   Continued...