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UPDATE: BHP Says Dispute Halts Philippines Nickel Project9-1-08 3:01 AM EDT
-(Dow Jones)- (BHP) said Monday work on the proposed Hallmark nickel laterite project in the has been interrupted due to a dispute with a local shareholder.
The halt on work is the latest set back for the government, which is attempting to attract of foreign investment to the local mining sector by 2010, with projects facing challenges ranging from communist rebel attacks to disagreements over contracts.
"BHP Billiton is in the process of undertaking an early stage study into the possibility of a project at the Hallmark prospect," a spokeswoman said.
"This study has been interrupted because of a dispute with a local shareholder."
BHP said prior to the interruption it had been evaluating the prospect on a schedule agreed with the local shareholder and in line with the guidelines of the tenement agreements with the government.
The miner said it is seeking to resolve the dispute through international arbitration and continues to support the Hallmark project.
The local shareholder in question is Asiaticus Management Corp., whose President has been calling for the project to be fast tracked.
The international arbitration was filed by BHP Billiton to prevent Asiaticus from rescinding its joint venture agreement, with hearings taking place in in July.
While the project is in its early stages it has appeared in the past on BHP's bubble chart showing the company's future development options, although it was absent from the chart when BHP released its results last month.
BHP hasn't put a figure on the price of a potential development at Hallmark, but Philippines Environment Secretary said last year BHP expected to spend between and and was looking at a plant with annual capacity of 50,000 metric tons of nickel a year.
-By , Dow Jones Newswires; 61-3-9671-4313; alex.wilson@dowjones.com
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