Due to various unfavorable factors, the programme cannot resume under the existing framework, Chinalco said.

Chinalco and Queensland government had signed an agreement worth US$2.2bn to develop the Aurukun bauxite mine on March 23, 2007. The agreement was due to expire on June 30 this year.

Chinalco did not explain why it chose not to extend the agreement.

Some analysts pointed out that rising costs, oversupply in the aluminum products market as well as the high costs of building a refining factory in Queensland have made Chinalco’s project very difficult.

However, Chinalco also emphasised in the announcement that it will continue to communicate with the Queensland government about other opportunities to develop the mine.