Quote:
Originally Posted by GGG
Agreed, that was my point. People who say its going to cost more in the future are wrong.
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How do you know this? Do you have a crystal ball that predicts the eventual slowdown and reduction in material cost? You posted an article to back up your statement from a different country (region) that has no relevance in Alberta.
There is an aggregate shortage in Alberta. Susan lake, which supplies the vast majority of Ft Mac, is dry in 3 years, and they pull almost 3 million ton per year from it. Outside of that deposit, there isn't a lot of readily available aggregate in Northern Alberta to support the major oilsands operations, let alone the daily O&G exploration. There are already companies trucking stone from Cochrane to Ft Mac in preparation for the swing that's about to happen, which would have been LUDICROUS to suggest 5 years ago because of trucking costs. It will only get worse in 5 years unless we figure out a way to get cheap stone into Alberta. I've seen imports from China already happening, but that's hit and miss with road spec, and no one wants to go that route (yet) unless they have to, because it costs jobs. I believe we should protect our province from this type of thing, but that's a totally different argument for a different thread.
Yeah sure in 20 years we might stagnate and the economy collapses making the project "cheap" and in line with inflation, but that's waaaaaay down the road. Even then it's not a given; there's as much chance of that as there is that we continue growing like we have the last 20 years. IMO the time to do it was 2012 when the US subsidies dried up, and Alberta drilling activity was low(er). MAYBE you could have saved a few $$/ton, but that opportunity is looooong gone. My US clientele (which includes the largest cement producer in the world, Lehigh/Hanson) is starting to ramp up production as the US economy comes around. The Dakotas are becoming a suckhole for labour and materials as they develop, which in comparison to Alberta is the Wild West. Anyone sitting on an aggregate deposit is sitting on a gold mine in those areas, because you can't build roads and leases without rock. Demand has never been higher.
Unless you can figure out a way to build an overpass in Vietnam (or some other region with cheap material and labor) and truck it to Alberta, your local build costs in the near (and IMO the far) future are going to easily outpace National inflation. Until then, we are stuck in a supply crunch which is going to equal higher prices.
Stone is a commodity, and it isn't changing anytime soon.