UPDATE: BHP Indonesia: May Sell 25% Maruwai Stake By 1Q 2010

BHP Billiton Ltd. (BHP) will sell a 25% stake in its Maruwai metallurgical coal development in Indonesia and hopes to wrap up a sale as early as the first quarter of 2010, a senior executive at the company's local unit said Thursday.

BHP has begun seeking expressions of interest for Maruwai from strategic investors, Edwin Gerungan, president director of BHP Billiton Indonesia, told Dow Jones Newswires.

"There have been many interested investors," both local and foreign, he said.

Gerungan said UBS has been hired to advise BHP on the sale but declined to give further details.

His statement indicates that BHP will opt to continue developing Maruwai with an investment partner. The Anglo-Australian resources producer had also previously considered an outright sale of Maruwai, which consists of seven coal mine sites in the Central and East Kalimantan provinces.

Separately, Darjoto Setiawan, managing director of diversified Rajawali Group Corp., told reporters his company aims to submit a bid for the Maruwai stake after it completes due diligence. He said Rajawali is among 25 investors who have expressed interest, but didn't elaborate.

Indonesian state-owned nickel miner PT Aneka Tambang (ANTM.JK) and a consortium led by state coal miner PT Tambang Batubara Bukit Asam (PTBA.JK) have previously said they will seek to acquire stakes in Maruwai, as have local coal companies PT Medco Energi Internasional (MEDC.JK), PT Adaro Energy (ADRO.JK) and PT Bumi Resources (BUMI.JK).

BHP earlier this year dropped a plan to spend about $100 million developing the Haju trial mine, the first stage of the Maruwai development, saying the project didn't fit with its long-term investment strategy.

BHP Billiton had planned to eventually produce 2 million metric tons of coal a year from Haju and 3 million to 5 million tons a year at the larger Lampunut deposit in Maruwai and to build transportation facilities in the area.

-By Linda Silaen, Dow Jones Newswires; 62 21 3983 1277; [e-mail]