Glencore Xstrata halts $7bn Australian coal mine

Newly merged mining giant Glencore Xstrata said on Wednesday 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 told AFP. \"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 slowing China and other economies and cheaper supply comes online from the Asian giant and countries such as Mozambique. 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. BHP\'s annual net profit slumped 29.5 percent to US$10.88 billion in the year to June, while rival Rio Tinto was down 71 percent for the first half at US$1.72 billion. 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 as Australia\'s decade-long, Asia-led investment boom unwinds. Queensland Premier Campbell Newman, a vocal opponent of the outgoing Labor government, 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\". Before losing Saturday\'s national election Labor had been reviewing a number of port and other proposals in Queensland after the UN threatened to downgrade the Great Barrier Reef\'s heritage status due to rampant coastal and resources development. Australia\'s mining-powered economy faces an uncertain future as it transitions towards other drivers of growth, with the Reserve Bank of Australia forecasting a noticeable drop-off in resources project investment in coming years.