BHP drops Indonesian nickel plan

Sydney (ANTARA News) - Anglo-Australian mining giant BHP Billiton said Thursday it had ended a study into a potential integrated nickel development in eastern Indonesia. 

"The study has not been able to identify a business case which would support an investment in this opportunity," BHP was quoted by AFP as saying in a statement. 

Gag Island in eastern Indonesia was initially being evaluated and a second resource at Buli was later included, following a conditional agreement to form a joint venture alliance with Indonesian miner PT Antam Tbk. 

"The agreement with PT Antam Tbk was conditional on obtaining a Contract of Work for the Buli resource by 31 October 2008 which has not been achieved," BHP said. 

"BHP Billiton has therefore decided to terminate the agreement with PT Antam Tbk. As a consequence of terminating the integrated study, BHP Billiton will not pursue a stand alone development at Gag Island." 

BHP, the world's biggest miner, would continue to work closely with the Indonesian government and regional and local authorities on other projects in the country, the statement said. 

Jakarta has been desperate to boost foreign direct investment, particularly in the mining sector where companies have complained of confusing regulations and red tape.