The resources giant – which received final approval for the merger less than two weeks ago – also is putting pressure on the Queensland government to be more proactive in developing infrastructure during the industry downturn.

“Over the past few years, Xstrata Coal has been studying a potential new coal export terminal development at Balaclava Island,” the company said in a statement.

“Following completion of the merger with Glencore and a review of the project, Glencore Xstrata has decided to cease its work on BICET, effective immediately.”

Glencore blamed the decision on the poor market conditions in the Australian coal industry, excess port capacity in Queensland, specific shipping limitations and concerns about the industry’s medium-term outlook.

“In the long-term, we believe Australia will need to increase its coal export capacity in an efficient and internationally competitive manner, in response to increased demand for coal in Asia,” the company said in a statement.

“As such, we believe the Queensland state government will need to ensure its long-term ports strategy provides for the growth of coal export capacity that is essential to the Australian economy, and the maintenance and improvements of people’s living standards overseas.

“We believe this can be achieved in an environmentally responsible and sustainable manner.”

Speculation is mounting about the future of the giant $7 billion Wandoan thermal coal project in Queensland’s Surat Basin, which is still the subject of litigation with local landowners.

The Wandoan coal project is looking more uncertain, with Glencore’s chief executive, Ivan Glasenberg, recently saying a merged Xstrata-Glencore would avoid greenfields projects.

Glasenberg told investors at an earnings presentation that the company would prefer brownfields projects because they were less risky.

Outgoing Xstrata global chief executive Mick Davis said in August the proposed 60 million tonne per annum Wandoan thermal coal mine remained “a very, very important component of Xstrata's growth potential going forward, but it is not part of the current phase of expansion”

Wandoan, which would employ about 1400 people during the construction phase, would also be a significant employer of operational staff.