Forestry and fiscal policies pose obstacles to Rio Tinto?s investment plan

The government?s forestry and fiscal policies remain obstacles for Anglo-Australian mining giant Rio Tinto?s plan to sign a contract to develop a US$2 billion La Sampala nickel mine in Central Sulawesi, a senior government official said on Wednesday.

Director general of mineral, coal and geothermal resources at the Ministry of Energy and Mineral Resources Simon Sembiring said Rio Tinto wanted a ?nailed-down? mechanism for tax payment, while the Ministry of Finance however insists that the firm has to pay in accordance with prevailing tax rules.

The firm has also demanded that the government would change the status of forests in the concession area. However, the Ministry of Forestry insists that forest status in Indonesia can change.

?Certainly, none would like to invest billions of dollars here, if the rules keep changing. However, the Ministry of Forestry says ?If Rio Tinto does not like it, just leave it?? Simon said.

Simon said he was not sure if Rio Tinto and the ministries would finally reach agreement over the issue.

?There is no problem as far as the Ministry of Energy and Mineral Resources is concerned. The problems are cross-departmental and non-technical. If there are no solutions, (the investment plan) could be fall through,? Simon said. (Godang)