It has been noted that Questor has been growing progressively unsure as to whether the project would be permitted and considers that management believes this as well.

Despite the fact that shares in both companies fell yesterday, the falls were in line with the rest of the sector – because the dollar staged a jumped after recent falls.

When the dollar falls, commodity prices are likely to rise because they are cheaper in other currencies. When the dollar rises, then commodity prices tend to fall.

It is significant that the joint venture would have outcome in $10bn (£6.3bn) of annual costs savings. Rio Tinto would also have expected an "equalization payment" from BHP.

Definitely, savings from the iron ore operations were a major contemplation when BHP made its all-share bid for Rio Tinto in November 2007 aligned with the conditions of a booming commodities market.

Part of Rio's defense against the advance was that its operations and infrastructure in Pilbara were far greater to those of BHP. Conversely, BHP deserted from any deal seeing that the credit crunch caused the commodities boom to calm down.