Construction of a $1.7 billion nickel project in Papua New Guinea has been halted due to fighting between local workers and Chinese labour, local media reported on Monday.

The fighting last Friday resulted in injuries to 14 Chinese and three local workers, as well as extensive property and equipment damage, said The Post Courier newspaper in the capital, Port Moresby.

Mine management told the newspaper that construction had halted at the site.

We call on the PNG Government and police to fully investigate the incident and bring the perpetrators to justice, and to promptly restore law and order on site, the mine management in a statement in the newspaper.

Construction of the Ramu mine has been plagued by disputes with local landholders, many of whom also work at the site. Majority-owner China Metallurgical Construction Group Corp (MCC) has accused officials of forcing locals to work in sub-standard conditions.

Last August, local workers attacked Chinese labour and shut the gates to the project over working conditions.

The Post Courier newspaper said the latest fighting was over rumours of an accident at the site involving a Papua New Guinea worker.

Police reinforcements have been sent to the mine site near Madang on the north coast to investigate the fighting and to provide security to Chinese workers, said The National newspaper.

Ramu is set to produce 31,150 tonnes of nickel and 3,000 tonnes of cobalt annually starting in late 2009.

Highlands Pacific Ltd holds an 8.6 percent interest in Ramu. (Writing by Michael Perry; Editing by David Fox)