While growth will continue, BMA said there would be much greater scrutiny of costs, and it would not proceed with projects if they are not cost effective.

In a presentation to the Queensland Government Major Projects Conference in July, BMA’s Commercial Relations vice-president, Ross Willims, said solid market conditions in the resources sector were expected to persist over the long term, but cost blow-outs presented a major challenge to growth in the immediate future.

“Unprecedented expansion across the resources sector has resulted in a highly competitive operating environment, resulting in project delays, shortages of key components and cost escalation in all key inputs – materials, equipment and labour,” he said.

“When you consider that over the past year, BMA’s contract truck stripping costs have risen by 32 percent, fuel is up by 38 percent and explosives costs have jumped by 32 percent, you can appreciate the impact on BMA projects under development or under assessment.”

BMA chief executive John Smith said worldwide growth in the resources sector has placed enormous pressure on costs and scheduling, impacting on the quality of work, project delivery and safety performance for many of BMA’s projects.

“Coupled with the difficulties that we and our contractors have experienced sourcing skilled people, accommodation and managing the growth, these factors are challenging our business like never before,” he said.

Willims said BMA was committed to its expansion projects, but would not risk jeopardising its competitiveness or sustainability by pursuing growth at any cost.

“Our business disciplines dictate prudent, cost-effective expansion, including our infrastructure commitments. We have resources for 20 to 30 years and have to protect our business long term,” he said.

“Decisions we make today have the potential to have an effect on our business years down the track, so it’s important that our cost structure is sustainable through all parts of the business cycle.”