Mozambique has passed a decree to regain ownership of the Corridor Sands titanium-ore project from BHP Billiton, according to a cabinet official.

The $500m project, located in the southern town of Chibuto in the Gaza province, was abandoned by BHP after it found the project was not financially viable following a pre-feasibility study in March 2009, Bloomberg reports.

BHP, which holds an exploration licence until October 2009, had planned to produce titania slag and iron, zircon, and rutile, Reuters reports.

BHP inherited the project as part of its acquisition of WMC Resources in 2005.

The Chibuto mines are considered to be one of the largest heavy-mineral sand ilmenite resources and the government has said recent studies have indicated that the mineral sands are of excellent quality, Reuters said.