The once-booming resource sector in Australia is slowing down due to lower commodity prices.

The unexpected slowdown is evidenced by the placing of several projects on hold or under review or even cancelled, while banks are less willing to lend to resources firms. There is also the axing of workers and idling of equipment that affect mining firms across Australia.

Iron ore prices dipped to a record two-and-a-half-year record-low as China's economy slowed down and led to lesser demand for coal used for power stations and iron ore for steel frames of high-rise edifices.

The government estimates there are $500 billion work of mining and resources projects in Australia which would allow the country to avoid the stagnation being suffered by Europe and the U.S. However, most of these ventures are in the pipeline stage and expected to be operations between 2012 and 2017.

Analysts pointed out that some of the projects in the pipeline would only push through if commodity prices would improve and there would be an increase in bank lending. They estimated that half of the $500 billion pipeline projects need financing or the green light from the company officials or regulators.

Among the shelved projects is Queensland's $9-billion expansion of Abbot Point, while BHP is still reviewing its planned $30-billion expansion of its Olympic Dam copper and uranium mine in South Africa and Xstrata's $7-billion Wandoan coal development in Queensland could face delay.

Meanwhile, BlueScope Steel reported its second consecutive $1-billion loss and forecast another losing year for fiscal 2013 due to weak international market conditions and soft domestic demand for steel.

Yancoal Australia, backed by China, announced on Monday a review of its expansion plans at all of its seven mines due to weaker demand from Asia.

Rio Tinto announced the closure of its Blair Athold thermal coal mine in Queensland by the end of 2012 while BHP Billion shuttered its Norwich Park coking coal mine also in Queensland.

Yancoal, majority owned by Yanzhou Coal Mining - a Hong Kong-listed firm - has five mines in New South Wales and two in Queensland. Yancoal reported on Friday a net profit of $433.2 million for the first half of 2012. Despite the growth in net profit, Yancoal forecast difficult times ahead and said it would consider all options to reduce operating costs amid expectations of weak coal prices.

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