APA, along with Western Power, operates the 365km Midwest gas pipeline to the Mt Magnet operation and has been forced to write down its stake by $20 million, leaving the asset valued at less than $3 million.

WA taxpayers are also likely to write off $30 million of infrastructure injected into the project by former Premier Richard Court.

Xstrata has officially placed the mine in care and maintenance pending a further review although it is now understood that production will be permanently stopped this year as the company declared the world's largest vanadium mine to be uneconomical, despite the mineral surging $US7.70 per kg in the last year to $US23/kg.

At this stage, no announcement has been made on whether the mine will be put up for sale to a third party.

Mid West Pipeline's other customer (Hill 60 Gold Mine at Mt. Magnet) continues to use the pipeline and Western Power said it does not expect any further write downs while the gold mine remained in operation.

APA also believes further opportunities exist in the Meekatharra Mineral Province for gas-fired power generation.