Adbri Ltd has confirmed that its Kwinana upgrade has risen in cost once again as inflationary pressures continue to hamper the project. The total project cost is now estimated at AUD385-420m (US$254-278m). According to the company, this has been driven by the escalating cost of construction, constraints on available labour and supply chain challenges.
Furthermore, as the final design details of the purchased equipment have now been completed, structural and piping quantities have proven greater than originally anticipated, further impacting on procurement and construction costs and hours. However, the project remains on track for commissioning in the 2Q24 with the plant due to be operational in the 3Q24.
“While we are disappointed the project cost is materially higher than initially forecasted, we remain confident the Kwinana Upgrade will support solid returns over the long term,” said Adbri CEO, Mark Irwin. “The consolidation of Adbri’s two existing cement production sites in Western Australia into a single, world class facility at Kwinana positions Adbri to take advantage of continued growth in the local market. We also expect to deliver greater operational savings than originally forecasted.”
The company first announced plans to consolidate its Munster and Kwinana operations at Kwinana in December 2020 with the project estimated to cost AUD199m and was due to be commissioned in mid-2023. August 2022 saw the company confirm a 15 per cent increase in the cost of the project due to inflationary and supply chain pressures. A further budget review was announced in March 2023 with the project cost rising to AUD290m and commissioning moving to 2024.
