Newly merged mining giant Glencore Xstrata yesterday said it had put its proposed US$7 billion Wandoan open-cut energy coal project in Australia on hold as oversupply drags on prices.
The Switzerland-based commodities firm, which came into being with a mega-merger between Glencore and Xstrata in May, said the massive 30-million-tonnes-a-year Queensland project was among several greenfield operations globally now on ice.
“A considerable amount of capital and human resources have been invested in the project to date and we consider it a valuable asset and important future option,” a Glencore Xstrata spokesman said. “However, as a result of the current over-supply, low prices and other challenges in the global coal market, we have placed the project on hold in the short-to-medium term.”
It is the latest Australian coal project to be shelved as demand drops in China and other economies and cheaper supply comes online from other countries.
Other major miners, including BHP Billiton, have reduced coal operations and laid-off workers in a bid to find savings amid plunging revenues and muted global conditions.
Australian prime minister-elect Tony Abbott has vowed to rip up mining profits and corporate pollution taxes in a bid to improve the resources sector’s fortunes.
Queensland Premier Campbell Newman said he had asked Abbott to “get out of the way” of the state’s mining industry and green-light major projects “as soon as possible.”