BHP BILLITON has abandoned its $US100 million ($126m) Haju coking coal mine in Indonesia and its study of a bigger mine as the global slowdown continues to curb expansion.
"BHP Billiton has assessed the progress of the Haju trial mine and determined it is not a sufficient fit with our long-term investment strategy," it said yesterday.
Haju, part of the bigger Maruwai development, was approved last July and was expected to start production this year at a rate of a million tonnes a year, with potential to expand to two million tonnes.
As well as abandoning the Haju trial mine, BHP has stopped work on a feasibility study of a second-stage expansion of Murawai, known as Lampunut.
"Further evaluation of the company's interests in the Maruwai coal project is under way to determine the best future commercial options," BHP said.
BHP would not say whether it had plans to sell the project, which it owns outright. It would also not say how much of the $US100m capital expenditure estimate had already been spent.
The Lampunut deposit, on which a feasibility study started last year, was seen as being able to support an operation of 3 to 5 million tonnes a year. Coking coal prices slumped 58 per cent in annual contract negotiations with Japanese steel mills this year.
BHP has slashed production and more than 1000 workers at its Queensland coking coal mines as non-Chinese steel production in Asia slowed rapidly. China, traditionally not a buyer of coking coal, has helped cushion the demand blow, becoming a sizeable importer.