AUSTRALIA'S biggest resources companies have revealed that more than $50 billion worth of expansion projects will not go ahead as planned, in the latest sign that the peak of Australia's resources boom has passed.
In one of the biggest corporate decisions of the year, BHP Billiton confirmed that plans for a $30 billion expansion of its Olympic Dam mine in South Australia and a $20 billion expansion of Western Australia's Port Hedland will not proceed.
The bombshells came on the day Woodside Petroleum indicated long-held plans to spend $5 billion doubling its Pluto gas project were unlikely to go ahead in the short term due to a failure to find enough gas off WA.
While the three massive proposals have not been permanently axed, all appear unlikely to be developed, as slowing rates of growth in China drag commodity prices down from their historic peaks of recent years.
BHP had been due to approve both projects before Christmas, but confirmed yesterday that neither would be approved in the next 12 months, and more time would be taken to investigate cheaper ways of developing them.
The Olympic Dam decision is a symbolic moment in the decline of the resources boom, as it would have been the biggest open cut mine in the world and took seven years of painstaking work through design and approvals.
BHP's chief executive, Marius Kloppers, listed factors that had made the copper, gold, silver and uranium project less financially attractive: soaring construction costs, the high Australian dollar, sliding copper prices and the depressed outlook for uranium after the Fukushima disaster.
''It is the concept that we have been developing which is not viable given the current set of circumstances, particularly the capital cost of construction,'' he said.
The decision reignited debate in Canberra over the merits of the government's new taxes on mining and carbon.
Olympic Dam's minerals are not affected by the mining tax - which is levied on profits from iron ore and coal sales - but the Opposition Leader, Tony Abbott, who admitted last night he had not read BHP's statement, said the new taxes were a factor in BHP's decision because they had trimmed the total profits the company had available for new projects.
''All we want for investors in this country is a level playing field,'' he said. ''The carbon tax and the mining tax mean there is no level playing field in Australia vis-a-vis elsewhere.''
Mr Abbott blamed ''industrial militancy'' in mining for making Australia a less inviting place to invest: a reference to the rolling strikes that have dogged BHP's coal joint venture in Queensland.
The comments were not supported by Mr Kloppers, who said the federal and South Australian governments had given ''absolutely fantastic'' support to the Olympic Dam proposal.
The Resources Minister, Martin Ferguson, said the government was ''disappointed'' at the decision, but he rejected links to the mining and carbon taxes.
''There's nothing more the South Australian and Australian governments could have done,'' he said. ''This is a board decision, it is a commercial decision.''
The decision is a major blow to South Australia, which had expected the Olympic Dam expansion to deliver a huge boost in jobs and a royalty stream of about $350 million a year for decades.
But there was good news for the millions of Australians who hold shares in BHP, as the company increased its dividend payments by 11 per cent. BHP shareholders will get a total of US112¢ a share for the year to June 30, 2012.
with Henrietta Cook