South Korea?s Hyundai Group has expressed interest to buy into cash-strapped OceanaGold of Australia, a mining official said yesterday.

Bureau of Mines director Horacio Ramos told reporters that Hyundai was among the several prospective investors negotiating with OceanaGold to help finance the beleaguered mining company?s $320-million Didipio gold and copper project in Nueva Vizcaya province.

?There are five companies that expressed interest to invest in OceanaGold, including Hyundai. But most would want the controlling share and OceanaGold is trying to hold on to that,? said Ramos.

Hyundai, the world?s fifth-bigger car maker, operates an integrated steel mill and has interests in financial, logistics and transport systems.

Environment Secretary Lito Atienza said OceanaGold was seeking new investors to provide fresh funds. OceanaGold halted operations in December due to funding problems.

?I spoke to a senior company [OceanaGold] official the week before the holidays and he was optimistic about the prospects of a new investor coming in,? Atienza said in a separate briefing.

Atienza said the government gave the Australian-listed company three to six months to revolve its funding problems before turning over the project to state-run Philippine Mining Development Corp.

?They asked us for a reasonable time [to get an investor] and we are willing to wait for a reasonable time,? he said.

OceanaGold had planned to commence commercial operations by the middle of 2009 before suffering financial problems. Work on the mine slowed down in November before OceanaGold decided to put the project on hold.

The company spent $120 million on mine development and needs an additional $200 million to fund construction works.

Higher costs of equipment and raw materials, delay and a tax dispute with the local government have raised the total project cost of the Didipio mine to $320 million last year from $155 million in 2006.

Ramos said the company sought a meeting with Environment officials within the month to discuss a new program schedule.

?They need to justify why they deviated with the original work program. They have to revise their development program which is yet to be submitted to the department,? he said.

OceanaGold obtained a financial and technical agreement with the government to develop the Didipio mine. The contract allows fully foreign ownership of the project.

OceanaGold had expected the Didipio mine to produce around 120,000 ounces of gold and 15,000 tons of copper concentrate annually in the first 10 years of production. Othel V. Campos, with Bloomberg