Indonesian govt. confirms BHP to sell major coal project

BHP Billiton Ltd (BHP.AX: Quote) plans to sell its Indonesian coal project after deciding....

BHP Billiton Ltd (BHP.AX: Quote) plans to sell its Indonesian coal project after deciding not to proceed with the project on Borneo island, a government mining official said on Friday.In June, BHP Billiton said it would not go ahead with the Haju trial coal mine in Central Kalimantan because it did not fit with its long-term investment strategy."We have received a letter from the firm saying they are resigning from the project and plan to sell their interest to a third party," Witoro Soelarno, secretary at the directorate general of mineral, coal and geothermal at the energy and mines ministry, said."It will be business-to-business and the government will not meddle in," Soelarno said.The global financial crisis and sharp falls in metals as well as coal prices have forced some companies to abandon or put on hold their plans to bring new mines on stream.Haju was stage one of the Maruwai coal project, the 100 percent BHP Billiton owned metallurgical coal deposit, in Central Kalimantan which was expected to produce 1 million tonnes of metallurgical coal -- used for steel-making -- per year.In June last year, the firm announced it would invest $100 million to develop the project which was expected to start producing in the middle of this year."We are continuing to review our commercial options in relation to the project, including potential sale of our interests," said Indra Diannanjaya, president director of PT Lahai Coal, which is part of BHP’s Maruwai coal project."We are seeking expression of interest from a number of parties in relation to this option," he said, without elaborating.Some companies have shown interest in buying BHP Billiton’s coal project.Indonesian private equity fund Saratoga capital was interesting in buying the project, its chairman Edwin Soeryadjaya said in an interview. [ID:nSIN218978]In November last year, BHP decided also to scrap a study into developing an integrated nickel project in eastern Indonesia which was under a conditional agreement with Indonesian state miner PT Aneka Tambang Tbk (ANTM.JK: Quote). (Reporting by Fitri Wulandari; Editing by Ed Davies)