Gladstone Pacific Nickel said its Chinese partner has decided not to renew its Memorandum of Understanding for a nickel project in Queensland, Australia, because of weak market conditions.

China Metallurgical said it will slow down activity on the Gladstone nickel project, which could delay it for up to two years.

The project has received all necessary regulatory approvals and is poised to take advantage of the next nickel cycle, Gladstone said.

Gladstone plans to seek extensions to the land purchase and environmental agreements of the project to reflect the potential two-year delay.

It has launched a review of the project’s scope to lower the capital expenditure.