Diversified miner Xstrata Plc (XTA.LN) has decided to move forward with its Frieda River 160,000-metric-ton copper project in Papua New Guinea, joint venture partner Highlands Pacific Ltd. (HIG.AU) said Tuesday.

The US$2.57 billion project is moving to the pre-feasibility stage, which should take about 18 months, Highlands Pacific said in a statement.

Construction is planned to start in 2012, and output in 2016.

News of the project moving forward marks a rare positive point in a metals market under pressure from huge price falls last year, resulting in several projects and mines across the base metals spectrum going on the backburner or closing down.

The mine will also produce 240,000 troy ounces of gold.

-By Elisabeth Behrmann, Dow Jones Newswires;

61-2-8272-4689 elisabeth.behrmann@dowjones.com

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