R BHP Billiton has shelved plans for its $30bn (£18.9bn) Olympic Dam expansion, and said that no major new projects would be approved until next June.
The delay to the Olympic Dam project in southern Australia, which is the world’s fourth-largest copper deposit and largest uranium source, came as BHP reported a 35 per cent plummet in profits.
BHP cited subdued commodity prices and higher capital costs for the delay to Olympic Dam, as the mining company is targeting significant cost savings this year, although it declined to give an exact figure.
Chief executive Marius Kloppers said yesterday that BHP needed to develop “a less capital intensive option to replace the underground mine at Olympic Dam”.
The Jansen project in Canada and the Outer Harbour project in Australia are also understood to be under pressure.
The Anglo-American mining giant’s profits slid to $15.4bn, from $23.6bn, in the year to 30 June.
Underlying earnings fell by 15 per cent to $27.2bn, hurt by weakness in commodity markets and industry-wide cost pressures.
Around 20 major projects are in execution at the moment with a budget of $22.8bn, which BHP class as “largely low risk”. They will deliver first production before the end of the 2015 financial year.
Kloppers announced earlier this month that he would forgo his bonus, as declining US gas prices hit the $3.3bn shale gas write down.
The shares closed down 1.84 per cent at 1,947p yesterday.