BHP Billiton chief executive Marius Kloppers last week denied widespread reports that the expansion had been shelved.

“At the moment, it is not frozen,” he said. “We are carrying on. We are spending money, there are 200 engineers working on it. Otherwise we would have made a statement to the contrary.”

The announcement added to another piece of good news this week for residents of Roxby Downs, who learnt repairs had been completed to the mine’s damaged main shaft.

However some uncertainty still remains for the expansion and the more than 20,000 jobs it is expected to create in Roxby Downs, as a PR battle between the Federal Government and mining companies grows in intensity.

Both the government and miners took out full-page advertisements in national newspapers on the weekend, while government announced controversial plans to spend $38.5 million on advertisements to counter the mining company campaign against the tax reforms.

On the weekend Prime Minister Kevin Rudd defended the move to enact a “national emergency” clause to grant his government exception from its own restrictions on taxpayer-funded advertising, saying the advertisements were in the public interest because they helped protect the Australian economy from damage.

“We have a responsibility to make sure the facts are out there, and not simply subjected to a scare campaign funded by some very, very big vested interests,” he said.

However the advertising splurge has drawn scathing criticism from both sides of the mining tax debate, including from Australian Greens leader Bob Brown. “The Rudd government’s abandonment of their own guidelines demonstrates the need for laws to govern taxpayer funded advertising campaigns,” he said.

“We are also investigating measures to prevent corporations and their representative organisations from effectively claiming taxpayer funded subsidies to run advertising campaigns that are demonstrably political in content.”