Fortescue Metals Group Ltd., the third largest iron ore producer in Australia, revealed today that it has put two of its three expansion projects on hold as it decided to review the potential impact of the proposed Super Profits Tax. This step of Fortescue is supposed to put some pressure on the Government to back down over its proposed new mining tax.

Fortescue now became the third company after BHP Billiton Ltd and Rio Tinto in putting projects on hold. Fortescue said today that it is putting two expansion projects worth $A17.6 billion on hold. Fortescue said that it is putting its $A10.5 billion Solomon Hub project and $A7 billion Western Hub development on hold by immediate effect.

Fortescue's decision to place the projects on hold also means that around 30000 jobs will be placed on hold. The company said its review would focus on the funding implications of the imposition of the new tax onto projects that were financed prior to the announcement of the proposed tax. However, Fortescue said that it decided to continue the expansion work at its Chichester hub project. The company is planning to increase its capacity to 95 million tons of iron ore a year from 55 million tons now.