Prince George, B.C.-  The Board of Directors for Rio Tinto Alcan has approved  pumping another $1.5 Billion dollars into the Kitimat Modernization project.

That approval puts the cost of the project at $4.8 billion.

Rio Tinto Alcan spokesman, Brian Tucker, says the two major reasons for the cost overrun are labour shortages and rising construction costs “The labour shortage, obviously it’s a very competitive market in Western Canada, and it’s been a challenge for us keeping up with the  turnover and schedule as we work through  completing the project.   There are a number of issues, but those are the two major ones.|”

Tucker says the construction is 50% complete, but when you add in the engineering and prep, the project is  70% complete. “We put the bulk of our focus of the major projects team on the project to make sure they could right this ship and we feel now  that that has happened and we’re  working with the contractor to ensure  that continues until the completion, which we expect  to be in the first half of 2015.”

The project was slowed for a time to allow commodity prices and the global economy to improve.

The  comparison can be made that the Site C dam project, which is  working from  scratch,  is pegged at $8 billion dollars and  the modernization project is more than  half that amount.  Tucker says the rising costs of the modernization project may be described by some as “disappointment” but adds that it is a very complex project “Essentially what we are doing is building a new smelter on top of old infrastructure.  In some cases we have planned expansion where we’re just adding on to an existing plant and you could call than a modernization, this is more than that.  It’s essentially a rebirth of a plant it’s a very complex project.”

There are 3,000 people working on the site, “It is no small project for sure,” says Tucker “ it’s one of the biggest  projects in Rio Tinto’s world for sure.”