Around 50 workers will be axed from Gladstone’s oil shale demonstration facility as the plant goes into care and maintenance.
Queensland Energy Resources (QER) was planning to convert the plant into a commercial oil shale operation but failed to secure the billion dollar investment required.
QER began the two-year development program in October 2011 and successfully produced high quality ultra-low sulphur diesel and aviation fuel for testing and certification.
However QER chief Pearce Bowman says investors see Australia as a costly place to do business, The Bulletin reported.
"It was hoped that we could move through with that investment into the next stage," Bowman said.
"That hasn't happened - we'll be continuing to look for that investment.
"In the meantime, the decision - as difficult as it is - has been taken to gradually close the demonstration plant."
Bowman complimented the plant’s staff for their hard work.
"I am very grateful for their efforts and achievements in demonstrating that oil shale can be developed in harmony with the community and environment," he said.
"Our plant has not only operated extremely well for more than two years, it has done so without a single complaint from the community."
Bowman said the oil technology would be required in the future, and was hopeful of finding a determined investor.
"We hope to find a partner who shares our view that the current Brent oil price of almost US$110 per barrel represents a reality about oil supplies that is likely to persist, in contrast to the substantial oil price decline currently assumed by global commodity markets," he said.