AAP reported that shares in Aquila Resources fell more than 3% on November 30th after the company said it could reduce its costs by USD 2.4 billion.
The minerals explorer said that there was potential to reduce capital costs from USD 7.4 billion to USD 5 billion and foreshadowed that capital requirements could be reduced further. It comes almost 2 months after the company announced a USD 1.4 billion cost blowout for its contentious West Pilbara iron ore project.
Aquila said that it could outsource rail operations, port infrastructure, power generation, port and mine accommodation, fuel supply and distribution, tug supply and services and processing at its West Pilbara iron ore project.
Aquila in a statement said that there was an opportunity to transfer risk to third party infrastructure and service providers and increase overall project returns through cost saving efficiencies.
The company's primary focus is the development of the West Pilbara iron ore project and Eagle Downs hard coking coal project in Queensland. Aquila said that it would seek a resolution for the 2012-13 budget with its JV partner for the West Pilbara iron ore project.
The company said that ''Aquila remains hopeful that this will be resolved in early 2013.'' It plans to increase its cash position through the sale of Belvedere.
However, Aquila owns 50% of the West Pilbara iron ore project, an integrated mine, rail and port development, which is predicted to produce 30 million tonnes of new iron ore.
Meanwhile, construction at the Eagle Downs site substation is expected to be completed in the Q1 of 2013. The company will maintain its current development schedule and budget for its Eagle Downs project, which is also under way.