BHP Billiton has cancelled its $US20 billion Olympic Dam expansion, blaming weak commodity prices and spiraling costs.
In a statement this afternoon BHP CEO Marius Kloppers said the company was looking for a cheaper alternative to expanding the project.
"As we finalised all the details of the project in the context of current market conditions, our strategy and capital management priorities, it became clear that the right decision for the company and its shareholders was to continue studies to develop a less capital intensive option to replace the underground mine at Olympic Dam," he said.
"We believe today's decision reflects an appropriate, prudent and disciplined course of action."
In announcing the cutback BHP said it was looking at a different plan "involving new technologies" to make the project cheaper.
"Olympic Dam is a resource of enormous potential and we will continue to work on technological and design alternatives that have the potential to substantially improve the economics of the expansion, while also completing some early stage site works," it said.
This afternoon resources minister Martin Ferguson told ABC News he was not surprised at the company's decision to shelve Olympic Dam, given the dent in commodity prices.