Rio Tinto expects Indonesia to stabilize: Report

Rio Tinto Plc chairman Robert Wilson said the group expected the environment in Indonesia to stabilize and maybe improve under the new government and considered its Indonesian contracts secure, Reuters reported on Thursday.

Rio's coal and copper/gold operations in Indonesia have been unaffected by regional political troubles in recent months, and Wilson said the company did not expect conditions to worsen.

"We don't actually anticipate a deterioration. It's very difficult to see that it will get worse than it has been during the last 12 months," he told analysts after the company released its results for the first half of 2001.

The company was waiting to see whether President Megawati Sukarnoputri's government would ease regional problems stemming from the expectations created by her predecessor, Abdurrahman Wahid, in areas seeking greater autonomy.

"We are going to be watching clarification about the process of granting more regional autonomy and how that's going to pan out in the future," he said.

But he added that Rio Tinto was not concerned about the new government interfering with existing contracts.

"There has never been a track record of the Indonesian government violating contracts of work. So I don't think that we're going to find the fundamental ground rules are likely to be changed," Wilson said.

Rio Tinto shares closed up 1.1 percent or 37 cents at A$33.80 in Sydney shortly after it released its interim results, while its shares in London last traded up 0.3 percent at 1185 pence. (*)