Norwegian aluminium company Norsk Hydro has abandoned its bauxite mining plans in the Mitchell Plateau region to the north Kimberley, giving back its mining leases to the state government.
The mining leases were held in joint venture with Perth company United Minerals Corporation, which is currently being taken over by BHP Billiton, mainly for its iron ore assets.
There had been speculation that BHP would offload UMC's bauxite assets.
Norsk Hydro's move was welcomed by the Wilderness Society, which has urged other mining companies holding bauxite leases in the area to follow Norsk Hydro's lead.
Norsk Hydro project director Wenche Agerup said that together with UMC, it had decided to terminate the bauxite and alumina joint venture.
"This decision has been taken based on a number of considerations, among other things the current lack of knowledge and scientific documentation relating to the environmental values in the region," he said.
"Development decisions in this region should in our view be taken in the context of a comprehensive development plan for the Kimberley."
Norsk Hydro and UMC came together in 2007 with an aim to develop an integrated bauxite mine and alumina refinery in the region. The cost at the time was estimated at between $4 billion and $5 billion.
