Mozambique is seeking a new investor for the $500 million Chibuto heavy mineral sands project after global miner BHP Billiton (BHP.AX: Quote) BTL.L dropped it because it was not viable.

Mineral Resources Minister Esperanca Bias said Mozambique was open to talks for future development of the project.

If there appears a company which is interested in the Chibuto heavy sands (project), we are open for negotiations, Bias told Reuters.

BHP Billiton, which holds the exploration rights for the project until October 2009, envisaged an integrated open-cut mining, concentration and smelting operation at Chibuto to produce titania slag and iron, as well as rutile and zircon.

BHP spokeswoman Bronwyn Wilkinson said the company decided the project was not viable at this time and had stopped the project at the pre-feasibility stage.

The (pre-feasibility) study has found inadequate value to justify further development of the project at this point in time, she said in an emailed statement. (Reporting by Charles Mangwiro; editing by James Jukwey) (For full Reuters Africa coverage and to have your say on the top issues, visit: af.reuters.com)

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