The company announced this morning that operational risks associated with ongoing appeals against the project's approvals, as well as an unfavourable broader economic environment, drove the decision.

"After receiving full approvals for the Riley DSO Project in mid-2013 and having secured financing, including an iron ore hedge facility at a time of higher iron ore prices, Venture was well placed to fully underwrite the life of the project," Venture Minerals Limited managing director Hamish Halliday said.

"It is therefore with regret that on-going appeals have delayed the project and in turn deprived shareholders and the local Tasmanian community of this opportunity in the medium term.

"The company has, however, completed extensive pre-production work at the Riley Project over the past 18 months, which will remain in place affording Venture the opportunity to commence production, on relatively short notice, should circumstances change in the medium term."

Tasmanian Minerals and Energy Council chief executive Jeremy Kouw described the decision as disappointing for the West Coast and Tasmania.

"Ironically, if the mining activity at Riley had proceeded after the initial approval for the project last year, it would now be in operation, employing over 60 Tasmanians and putting $40 million per annum directly into the Tasmanian economy for the next two-and-a-half years," he said.

"Venture Minerals' decision on the Riley project is motivated by the continuing delays they have experienced throught he legal challenges and appeals brought by minority groups.

"This is again clear evidence that as a state we have real issues with project approval processes, which are sapping investor confidence in putting money into Tasamania and creating the jobs we so desperately need."