Fortescue Metals Group announced today that two of the mining company's three expansion projects have been placed on hold due to the financial impact of the government's proposed Resource Super Profits Tax (RSPT).

Of the three planned development projects, only Chichester Hub expansion from 55Mtpa to 95Mtpa will proceed. Fortescue has invested US$4.5 billion to date for its Chichester Hub development with 2,700 people employed in operations and 7,500 during construction.

Fortescue said that financing of Chichester Hub project is generated from internal cashflows to be provided from existing operations over the next two years, prior to the proposed implementation of the tax in FY2012 and payment in FY2013.

The planned development of Solomon Hub and Western Hub have been placed on hold until the finance impact of the RSPT can be fully determined.

"The uncertainty in the financial markets caused by the proposed tax and the cash impost that RSPT payments will place on future business revenues has necessitated an urgent review of the economics surrounding the development of Fortescue's major projects," said Fortescue in its statement to the ASX.

The 160 million tonnes per annum (Mtpa) Solomon Hub is estimated to be a $US9 billion investment, employing 6000 people in operations and 15,000 through construction.

Fortescue's Western Hub project is estimated to be US$6 billion investment with 4,000 people employed in operations and 7,500 through construction. Its development was designed to supply product for export together with product drawn from other miners within the western Pilbara region.