Rio issued a statement late on Friday outlining the reasons for its decision not to pursue the development of Abbot Pont some four months after it won the right to develop the project along with BHP Billiton, Anglo American and Vale.

Abbot Point is integral to the Queensland’s government’s plans to ramp up coal exports from the state, with the previous Bligh government hoping it would export 385 million tonnes per annum from 2017.

“We continue to see both a sustained upward pressure on costs and long time frames for regulatory approvals," Rio said in its statement.

"Rio Tinto's focus at present is evaluating potential alternatives to Abbot Point for additional port capacity."

Rio currently exports from the Dalrymple Bay and Gladstone ports in Queensland.

Abbot Point, which lies near the sensitive Great Barrier Reef, handles 50Mtpa and further expansion may be subject to constraints because of potential damage to the reef.

UBS Securities analyst Glyn Lawcock told BusinessDaily the decision was not surprising as he estimated Rio's resources in the area were insufficient to justify the expense, now that coal prices had softened.

"They would need to have increments of 30 million tonnes a year to go ahead with that type of expenditure, and I just don't think the coal is there," Lawcock reportedly said.

"My view is that Rio is and will become more focused on its vast coal reserves in NSW."

Last year Rio increased its stake in the NSW coal industry by buying out the minority shareholders in Coal & Allied and announcing plans to develop its Mt Thorley coal mine complex.

The withdrawal by Rio from Abbot Point also casts doubt on the development timetable for Clive Palmer’s China First project.

Palmer still needs approval from the newly elected Newman government for all three aspects of the project – a coalmine in the Galilee Basin, a rail line to Abbot Point and a wharf capable of exporting 30Mtpa.