UPDATE 2-BHP Billiton signs Indonesian nickel venture

(Adds Antam comments from Indonesia)

SYDNEY/JAKARTA, June 19 (Reuters) - BHP Billiton (BHP.AX) (BLT.L) has signed a joint venture with Indonesian miner PT Aneka Tambang Tbk (ANTM.JK) (Antam) to develop nickel laterite resources in eastern Indonesia, Antam said on Thursday.

Antam (ATM.AX) said in a statement to the Australian stock exchange that the 50:50 venture followed a heads of agreement in February last year and was still subject to BHP Billiton board approval.

The two companies have agreed to jointly study development of nickel deposits in the area around Buli in North Maluku.

Government controlled-Antam said last year the area had an estimated 57 million wet metric tonnes of high-grade nickel ore reserves and 79 million wet metric tonnes of high-grade nickel ore resources.

Nickel prices have more than halved since hitting a high above $50,000 a tonne in May last year, as stainless steel makers, which consume around two-thirds of the world's nickel, scaled back purchases in light of slowing demand for their products.

Darma Ambiar, Antam's development director, said both companies will conduct feasibility studies to determine how to develop the nickel mines.

"We are still evaluating whether to build smelters in one or two locations, which one has more economic value," Ambiar told Reuters.

Indonesia has some of the world's largest deposits of coal, copper, tin, nickel and gold, and is keen to earn more from the resources sector, particularly as strong demand from China and India is driving prices for many commodities up to record levels.

But the sector has been struggling to attract foreign money as uncertainty over changes to mining laws, rampant graft and red-tape have steered foreign investors away from Indonesia.

"The joint-venture is a breakthrough. The companies did not waste time waiting for the new mining law," said Priyo Pribadi Soemarno, executive director of the Indonesia Mining Association. "It means investors still have trust in Indonesia."

The mining law, which has been in the works for several years, is being held up by a parliamentary committee which cannot agree on how to authorise investors to develop state reserves.

Jakarta expects the bill to be passed before the parliamentary recess in July.

The Indonesian government said late last year it expects investment in geothermal and mining projects to reach $1.55 billion in 2008, compared with $1.35 billion in 2007. (Reporting by Mark Bendeich in Sydney and Andreas Ismar and Fitri Wulandari in Jakarta; editing by Sugita Katyal and Lincoln Feast)