Glencore Xstrata, the world's biggest exporter of coal for power stations, has cancelled its plans to build a A$1bn ($997m) new coal export terminal in Queensland, Australia.
The move follows a review of the project, which took place after commodities giant Glencore finalised its deal to merge with mining major Xstrata earlier this month.
"This decision has been made as a result of the poor current market conditions in the Australian coal industry, excess port capacity in Queensland, specific shipping limitations and concerns about the industry's medium-term outlook," the firm said in a statement.
Located about 40km north of the city of Gladstone in Queensland, the Balaclava Island Coal Export Terminal was designed to export 35 million tonnes per year, and was expected to create a new route for coal exports from the resource-rich basins of Bowen and Surat basins to customers in Asia.
Xstrata's Australian coal unit examined plans for the development of the coal terminal for several years prior to the company's merger with Glencore.
The scrapping of the coal terminal also indicates that the company could abandon its plans for the 30 million tonne-per-year Wandoan mine in Queensland, reports Reuters.
The Balaclava Island coal terminal was set to ship coal from the Wandoan mine.
Glencore Xstrata said that Australia, in the long term, should raise its coal export capacity in an efficient and internationally competitive manner in response to increased demand for coal in Asia.
Image: Poor market conditions in the Australian coal industry led to Glencore Xstrata's decision to cancel its Balaclava Island Coal Export Terminal project. Photo: dan.