BHP Billiton, the world's largest mining company, is revising its massive investment plans as base-metals markets have softened on slackening demand from China.
Marius Kloppers, the chief executive of BHP, announced last year that the company would spend US$80 billion over the next five years.
Since then, demand for metals has cooled markedly. Even the manufacturing superpower China has been affected by the continued economic woes in Europe and has revised its growth targets on fears of an overheating economy. This has caused BHP to reconsider a huge outlay in additional production capacity.
"We should pause, take a deep breath and wait and see where the pieces fall around the world," said Jacques Nasser, the BHP chairman.
Mr Nasser also acknowledged that the company would not fulfil its original $80bn spending pledge.
"It's a sign that their view is that commodity prices are not going to go up from here, and in that sort of scenario, you can't be spending $24bn to $25bn a year," said Hayden Bairstow, an analyst at CLSA.
The Thomson Reuters-Jefferies CRB Index, which tracks the performance of commodities, has slumped more than 11 per cent since hitting a five-month peak in late February.
BHP recorded a first-half profit of close to $10bn, driven by a lucrative iron ore business. Since then, China, which uses vast amounts of iron as it expands its infrastructure and builds up its urban centres, has slowed the pace of its development.
Economists polled by Reuters expect economic growth in the second quarter to slip to 7.9 per cent, which would extend the period of slowing growth to six consecutive quarters.
BHP has also said plans to expand a copper and uranium mine in Australia, and will make its investment decision on that project later this year, said Mr Nasser.