Philippine minister says BHP to continue work at mine

MANILA (Reuters) - BHP Billiton (BHP.AX) (BLT.L) will continue development work at a Philippine nickel project despite a long-running dispute with its local partner, the minister in charge of the mining sector said on Friday.

BHP, the world's biggest miner, has been in disagreement with unlisted local firm Asiaticus Management Corp since late last year over when to start commercial production at the Pujada site in the southern region of Mindanao.

"They have no intention of withdrawing," Lito Atienza, the secretary for environment and natural resources, told Reuters after meeting with BHP officials including Chris Campbell, BHP's chief development official for stainless steel materials, and country manager Troy Charlton.

"At this point, we can graduate to specifics and (BHP) is willing to study Asiaticus' proposal," Atienza said, declining to go into specifics. "To me, this is a significant step."

The Philippine group has accused the Australian miner of moving too slowly in developing the nickel project and has been pushing for immediate commercial production. Pujada is estimated to have 200 million tonnes of nickel ore reserves with 1.3 percent nickel.

The government, which is hoping to attract $10 billion (5.68 billion pounds) in investments to the mining sector over the next three years and is banking on BHP being a key contributor, is trying to mediate between the industry giant and Asiaticus.

BHP has scaled back operations due to the dispute and is seeking to resolve it through international arbitration.

BHP has committed to invest up to $2 billion in the mine site including a nickel processing plant and has spent nearly $3 million so far for exploration, based on latest government data.

Only around $1.7 billion has flowed into the Philippine mining sector since 2004 when the Supreme Court allowed foreign companies 100 percent ownership of local mining projects.