Mitsubishi has officially suspended its $6 billion Oakajee port and rail project in Western Australia.
Oakajee Port and Rail (OPR), the project manager, announced today that Mitsubishi is suspending all further work and is also reverting its Jack Hills mine expansion to care and maintenance.
Volatile commodity prices and uncertainty in the global metals market, as well as cost blowouts saw the price of the port rise from $4.4 billion to as much as $6.7 billion.
OPR said issues that slowed Oakajee works in November including a difficult economic climate and lack of consensus on joint venture partners talks had worsened.
"This will unfortunately require further reduction in staff numbers," the company said.
AFR reports the company's chief executive John Langoulant said the move was a difficult but necessary step.
"Progressing partnership discussions for the mine, port and rail project in the current economic environment for commodities is particularly challenging, and is probably now harder than it was in November 2012 when the decision was made to reduce expenditure on the project," he said.
"The Jack Hills mine and expansion project will be properly maintained so they can be ramped up rapidly when the conditions allow."
Western Australian Premier Colin Barnett this week said he is still hopeful the Oakajee Port & Rail project in the state’s Midwest can be restarted.
Returning from an official visit to Beijing he said he is hoping China and Japan will back the Oakajee project.
The project was designed to service the burgeoning Mid West and Yilgarn iron ore region, which has struggled to get off the ground.