Jim Letourneau's Blog

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Mine Delays Due to Shortages of Labor and Materials

This week Constellation Copper (CCU.TO) announced mine startup delays due to a shortage of pipe fitters.

Construction of the SX/EW process plant is currently +95% complete, with completion of pipe fitting being the only significant outstanding task remaining.  The aftermath of Hurricanes Katrina and Rita, coupled with the increased number of Western US mining and energy fuels construction projects during 2005, has caused an acute shortage of pipe-fitters. This shortage, coupled with the upcoming Christmas – New Year’s holiday break, has slowed the completion of the SX/EW recovery plant beyond the current physical completion schedule of early-January.  Constellation is currently making every effort to locate pipe-fitters to enable construction of the process plant to be finalized.

Earlier this month Fording Coal (FDG, FDG/UN.TO) announced that its Elk Valley coal mining operations will feel the impact next year of a global shortage of tires for heavy equipment.

I’ll elaborate on these themes in a new “Dark Side of Resource Stock Investing” article next week. In the meantime you can check out Part 1 and Part 2 of the Dark Side series.