Philippines Environment Secretary Jose Atienza said on Wednesday BHP Billiton Ltd. (BHP) will be allowed to pursue development plans for a Philippine nickel mine after an international arbitration panel ruled in the Australian miner's favour in a conflict with a local partner.
"BHP won the case and this should wake up the local partner that BHP is decided to remain in the Philippines and exercise their rights on the (joint venture) agreement." Atienza told reporters. "We are ready to implement the decision."
BHP and local partner Asiaticus Management Corp. had been at loggerheads over development plans at a mine in the Pujada peninsula in southern Philippines, where nickel ore reserves have been estimated at 150 million metric tons at 1.3% nickel.
Asiaticus had said BHP was too slow in developing the mining project and had failed to deliver on its investment promise.
Mines and Geosciences Bureau Director Horacio Ramos said an arbitration panel in Singapore had decided that BHP could proceed with its development plans at Pujada as it hadn't violated its joint venture agreement with Asiaticus.
The two companies agreed in principle last year on an "ore supply agreement" for Pujada that allows Asiaticus to start mineral extraction on certain parts of the area while BHP proceeds with exploration.
It isn't known whether this agreement will be carried out.
"That arrangement was feasible when nickel prices were at high levels," Mr Ramos said. "But why throw money away at this time when nickel prices have fallen?"
In 2007, the Philippine government announced BHP would invest up to $2 billion in the country, including the construction of a nickel processing plant.
The nickel facility should start construction by 2010 and be fully operational two years later, the government had said.
Source: Trading Markets; Dow Jones
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