BHP Billiton Ltd and Indonesia's Antam Tbk have signed a joint venture agreement to develop nickel laterite resources in eastern Indonesia.
The 50/05 joint venture follows the signing of a heads of agreement between the two companies in Perth in February 2007.
"This move is in line with Antam's strategy to move into higher technology and downstream metals processing activities," Antam said.
"This strategic alliance with BHP Billiton is also expected to mitigate the cost and risk of developing mineral deposits."
The agreement was signed in Jakarta on Wednesday by Antam president director, D Aditya Sumanagara and BHP Billiton's head of stainless steel materials Jimmy Wilson.
It is conditional on the approval of the BHP Billiton board, which is expected to take a decision within the next month.
Antam in currently pursuing a takeover of lead and zinc explorer Herald Resources Ltd with its China partner Shenzhen Zhongjin Lingnan Nonfemet Co Ltd.
The consortium is offer $2.80 a share for Herald.
The offer matches a competing bid from Indonesia's Bumi Resources Tbk.
The bids value the lead and zinc hopeful at $553.56 million.
Both suitors are seeking to gain control of Herald's key asset - the $US220 million ($A$233.42 million) Dairi zinc-lead project in north Sumatra - which is 20 per cent held by Antam-Zhongjin.
Herald is awaiting government forestry approvals for the project.
Antam-Zhongjin holds a 19.29 per cent stake in the target while Bumi holds a 19.86 per cent interest.
