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Rio Tinto Gets Permit for Indonesia Nickel Project

Industry News 09:05:11AM Mar 03, 2010 Source:SMM

JAKARTA, Mar. 3 -- Indonesia has given the local unit of Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) a mining permit for a nickel project in Sulawesi worth $2 billion, the company said on Tuesday.

The long-awaited permit is the first to be issued under a new Indonesian mining law passed in 2008 and could help increase certainty and lift flagging investment in the country's mining sector.

Rio Tinto launched an application for a mining contract of work -- a type of mining licence under the previous mining law -- in 1999 for its nickel project on Sulawesi island.

But when the new coal and mining law was passed the firm was required to apply for a shorter-term mining permit.

"Rio Tinto is pleased that tenure for the project has been secured through granting of this permit," the company said, adding that Rio Tinto now can now move forward with reviewing the development options for the project with increased certainty.

"Rio Tinto will now focus on completion of an order of magnitude study to progress with identifying the best value development pathway," the company said in an email sent to Reuters.

The Sulawesi nickel project is expected to have a capacity of 46,000 tonnes per year of nickel metal.

The government awarded the last contract of work to Australia's Indo Mines Ltd (IDO.AX: Quote) for its pig iron project in November 2008, a month before the new mining law was passed in December.

Indo Mines was also the first mining firm to sign a mining contract for a decade.

Southeast Asia's largest economy has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations tied to the new mining law.

The government has said it expected mining investment to hit $2.5 billion this year, up from $1.81 billion in 2009, supported by greater certainty after the introduction of new mining regulations.

 

Rio Tinto Gets Permit for Indonesia Nickel Project

Industry News 09:05:11AM Mar 03, 2010 Source:SMM

JAKARTA, Mar. 3 -- Indonesia has given the local unit of Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) a mining permit for a nickel project in Sulawesi worth $2 billion, the company said on Tuesday.

The long-awaited permit is the first to be issued under a new Indonesian mining law passed in 2008 and could help increase certainty and lift flagging investment in the country's mining sector.

Rio Tinto launched an application for a mining contract of work -- a type of mining licence under the previous mining law -- in 1999 for its nickel project on Sulawesi island.

But when the new coal and mining law was passed the firm was required to apply for a shorter-term mining permit.

"Rio Tinto is pleased that tenure for the project has been secured through granting of this permit," the company said, adding that Rio Tinto now can now move forward with reviewing the development options for the project with increased certainty.

"Rio Tinto will now focus on completion of an order of magnitude study to progress with identifying the best value development pathway," the company said in an email sent to Reuters.

The Sulawesi nickel project is expected to have a capacity of 46,000 tonnes per year of nickel metal.

The government awarded the last contract of work to Australia's Indo Mines Ltd (IDO.AX: Quote) for its pig iron project in November 2008, a month before the new mining law was passed in December.

Indo Mines was also the first mining firm to sign a mining contract for a decade.

Southeast Asia's largest economy has struggled to lure foreign investment into mining in recent years, compounded by some politicians taking a nationalist line on resource exploitation and also because of uncertainty over regulations tied to the new mining law.

The government has said it expected mining investment to hit $2.5 billion this year, up from $1.81 billion in 2009, supported by greater certainty after the introduction of new mining regulations.