Platinum Australia announced today that its plans to develop a new platinum group metal (pgm) mine were no longer viable due to a shift in commodity prices and currency exchange rates.

The news sent shares in the company down by a third to 20 Australian cents by late afternoon.

In a statement, Platinum Australia said the potential of an exploration at the Panton deposit in Western Australia had appeared favourable, but that market conditions made the project unfeasible.

While the two-year study was underway the price of palladium declined from $600 an ounce to less than $200, while the Australian dollar has hardened, making export less lucrative.

'While the project would be commercially viable at the prices and exchange rate prevailing at the start of the feasibility study, this is not the case currently', the statement explained.

The firm insists that the mine project isn't being abandoned, but postponed for an unspecified period while the company waits for more conducive economic conditions.