BHP Billiton To Begin Work On $1.34 Billion Indonesia Coal Project

BHP Billiton Ltd. (BHP) said Thursday it plans to begin work on the US$1.34 billion IndoMet coal project in Indonesia within weeks, a move that would open up a new mining province to help meet booming Asian demand for steelmaking raw materials.

Joint venture companies controlled by BHP and Indonesia's PT Adaro Energy (ADRO.JK) will begin building the Haju mine in jungle around 220 kilometers northwest of Balikpapan port by the end of the year, BHP said.

Haju is the first stage of the IndoMet project on the island of Borneo, which could be producing 5 million metric tons of coking coal annually by 2017. IndoMet is BHP's fifth-biggest coking coal resource.

"PT Lahai will construct a road and a mine (Haju) and related infrastructure, commencing, subject to approvals, in the fourth quarter of 2011," a BHP spokeswoman said in an emailed statement.

This will be followed by investments in mines and infrastructure by PT Maruwai and PT Juloi, two other joint venture companies, she said.

-By David Fickling and David Winning, Dow Jones Newswires; [phone]; [e-mail]