BHP, the world's biggest mining company, in August announced plans to spin off operations worth roughly $16 billion (10 billion pounds) - most of them acquired in its 2001 merger with South Africa's Billiton - to focus on its most profitable activities.

BHP said at the time that it would list the business on the Australian Stock Exchange, with a secondary listing on the Johannesburg Stock Exchange.

However, institutional investors objected to London's omission. Those required to place funds in European-only entities would have been forced to sell shares in the spinoff company - a grouping of assets in aluminium, nickel, manganese and lower quality coal - in the absence of a London presence.

The outcry forced BHP to backtrack, and the miner told shareholders in September that it was considering a UK listing.

"We are pleased to offer an additional listing in London in response to the interest investors have shown in the new company," BHP Billiton Chief Executive Andrew Mackenzie said on Thursday, confirming the decision.

"We continue to work towards completion of the demerger in the first half of the 2015 calendar year, subject to receipt of the necessary approvals."

Analysts and fund managers welcomed the move, but cautioned there was still concern over the fact that the spun off business would not qualify for membership of UK indices.

"This will alleviate some of the forced selling. Clearly, it would be better if they were in the indices, but I am encouraged that they are listening to shareholders," said Malcolm McPartlin, investment manager at UK-based fund Kames Capital.

BHP is expected to update investors before the end of the year on the demerged company's management, board, strategy and the timing of the sale.

(Reporting by James Regan in SYDNEY and Clara Ferreira Marques in LONDON; Editing by Richard Pullin and Susan Thomas)

Stocks treated in this article : BHP Billiton plc, BHP Billiton Limited