BHP Billiton in talks with Japanese coys on Gag nickel project despite suspension

State nickel and gold miner PT. Aneka Tambang Tbk.(Antam) said its partner in Gag island nickel project Australian resources company BHP Billiton had held talks with Japanese companies Mitsubishi and PAMCO over the possibility to jointly develop the project.

Antam said in its quarterly report released Friday that both Japanese companies and BHP?s unit BHP Asia Pacific Nikel had signed confidentiality agreement with Antam?s full knowledge.

Antam did not disclose the detail of the agreement.

BHP Billiton has 75 percent stake in the project with Antam holding the balance. The project is located in western part of Papua province.

BHP Billiton and Antam were forced to suspend activities on the island following the issuance of the Forestry Law No. 41/1999, which bans open-pit mining in protected forests, and the announcement by the ministry of forestry that the contract area was protected.

Canadian miner Falconbridge, which had signed agreement with BHP, quit the project because of the forestry issue.

Moreover, Gag island may lie inside the so called Raja Ampat islands marine park, which had been considered by UNESCO as ?world heritage? due to biodiversity richness.

BHPBilliton Chairman Don Argus said last November that BHP Billiton would not develop the project if it was declared by UNESCO as part of World Heritage.

However, Antam said in its quarterly report that Gag island is located in the western part of Raja Ampat islands and may lie outside of the eventual marine park.

?The World Heritage site selection is still at the beginning stages. It is not certain when The World Heritage status will be declared, or when may occur, whether Gag island will be included,? said Antam.

Antam said the project will remain suspended unless the government allows the project to be resumed. The company stated that there has been some progress in the government side lately that may lead to the resumption of the project. (alex)