Xstrata is considering abandoning its Mount Isa project in north-west Queensland, Australia, because of the super profits tax proposed by the government.

The operations include two underground copper mines with an ore capacity of 6.5 million tons a year, a concentrator with a capacity of seven million tones a year and a copper smelter.

Xstrata has already shelved a A$400m ($342m) investment at the Ernest Henry copper mine in Queensland, blaming uncertainty over the tax.

Xstrata maintains the new tax will reduce return in its projects, according to theaustralian.com.au.