BHP Billiton Limited (BHP) said it had decided to end a study into an integrated nickel development in eastern Indonesia. The miner said the study had not been able to identify a business case that would support an investment.

BHP said initially a resource at Gag Island in eastern Indonesia was being evaluated and then a second resource at Buli in Halmahera was included following a conditional agreement to form a joint venture alliance with PT Antam Tbk (ATM).

"The agreement with PT Antam Tbk was conditional on obtaining a contract of work for the Buli resource by 31 October 2008 which has not been achieved," BHP said.

"BHP Billiton has therefore decided to terminate the agreement with PT Antam Tbk."

The company said as a consequence of terminating the integrated study, BHP Billiton would not pursue a stand-alone development at Gag Island.

"BHP Billiton will continue to work closely with the Indonesian Government and regional and local government authorities in other projects in Indonesia."

At 1548 AEDT, BHP Billiton was trading down $2.51 or 8.9% at $25.79, while PT Antam Tbk was flat at $2.50.