Update-BHP may sell C. Kalimantan coal concessions

Anglo-Australian resources giant BHP Billiton may put its Central Kalimantan coking coal concessions known as Maruway project on sale after it had decided to scrap the project and declared it was no longer strategic to BHP?s future.

?BHP is reviewing options including selling the project or return the concessions back to the government,? Indra Diannanjaya, BHP Billiton Indonesia Spokesperson told reporters on Tuesday.

Indra said some 450 employees will lost their jobs over the decision.

The company announced on Tuesday that it would not proceed with the project. The Coal Project comprises seven Coal Contracts of Work (CCOWs). Of these, BHP Billiton was developing the Haju mine and conducting the Lampunut feasibility study to investigate the development of an open cut coal mine.

Work on the Lampunut feasibility study will also cease, other activities related to the CCOWs will be reviewed, and the workforce reduced accordingly, the company said.

The Haju mine was initially constructed to guide further development of the 100 per cent BHP Billiton owned large, metallurgical coal deposit in Central Kalimantan.

The decision will also marked the exit of BHP Billiton from Indonesia after it a nickel project in Eastern Indonesia last year.

BHP Billiton and other big mining companies have faced considerable pressure over the last several months, as commodity prices plunged in line with slowing Chinese demand. BHP earlier announced plans to slash 6,000 jobs worldwide, about 6 percent of its global workforce, because of the financial crisis.

Indonesian mining companies PT Bumi Resources and PT Aneka Tambang have expressed interest to buy BHP?s coal assets.

?Bumi is keen to know more about the matter. This would appear to be something that could be considered,? Senior VP for Investor Relations Dileep Srivastava said as quoted by The Jakarta Globe.

Alwin Syah Lubis, the president director of gold and nickel miner PT Aneka Tambang said that his company was also interested in the BHP coal concessions.

?If they were offered to us, we would be interested,? he said, ?but we would have to do due diligence.? (bernard)