FMG said the decision to place the Solomon and Western Hub projects on hold could affect up to 30,000 jobs.The company said the projects would be placed on hold until the implications of the proposed tax have been reviewed.“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,” FMG said in a statement.FMG said a key focus of the review was the funding implications of a proposed retrospective imposition of a cash drain on projects that were financed prior to the RSPT and the implications for financing new projects. The company will also seek clarification on the government’s tax guarantee for 40% of project losses in the event of bankruptcy. “This initiative has been proposed by the federal government as an incentive for projects to proceed despite the tax, however it is considered of no lending value by project financiers,” FMG said.“Therefore the financial modelling of any future development must account for the 40 per cent cash flow leakage without any compensatory benefit under the RSPT.”The development of the Solomon Hub includes the proposed Pilbara port at Anketell Point.FMG said plans to establish a debt-funded capital platform utilising equity derived from cash flow from the Chichester Hub would be severely impacted as a result of the proposed tax.The Solomon project is considered the company’s flagship and is set to produce 160 million tonnes per annum from 2013-14.The company said that until it could determine its financial position, the only work that would go ahead on Solomon would be the completion of existing studies.FMG said the proposed $6 billion Western Hub will also be put on hold.“Due to the federal government’s intention to impose the tax after a business commences to derive a return above the risk-free bond rate of currently 6 per cent compared to the company’s weighted average cost of capital of approximately 15 per cent, the economics of a leveraged project development are substantially impaired,” the company said.The expansion of the Chichester Hub will proceed as planned, as financing of the project is being sourced from internal cash flow generated over the next two years.The Chichester expansion will raise production from 55Mtpa to 95Mtpa from 2012.FMG plans to monitor its ability to repay debt and expects cash flow generated from current operations that was to be applied to equity to be severely curtailed.The company said the proposed tax was poorly designed and would affect mining investment and job creation.FMG chief executive Andrew Forrest has previously slammed the tax as being “abhorrent” and demanded the government eliminate it immediately.Shares in FMG slumped 6% or A23c to $3.83.