Rio Tinto facing obstacle in signing nickel project contract

Taxation terms remain major hurdle facing the Ministry of Energy and Mineral Resources and a mining giant firm Rio Tinto in drawing up a mining cooperation contract, Bisnis Indonesia reported Tuesday.

Director of Coal and Mineral at the Ministry of Energy and Mineral Resources Mangantar S. Marpaung said that the Directorate General of Taxation at the Ministry of Finance had yet to give inputs on the amount of tax payable by Rio Tinto.

?Our target (the Energy and Mineral Resources Ministry) is (the deal) can be signed in September. We have worked fast. But other related ministries do not seem to work like the way we do,? he said.

Rio Tinto's deputy for external relations Anang Rizkani Noor admitted that the company had yet to sign a deal with the government because no decision had been made on the amount of tax payable by the firm.

Rio Tinto and the government are currently negotiating a 30-year Contract of Work (CoW) on La Sampala nickel prospect located in the border of South and Central Sulawesi provinces. Director General of Mineral and Coal Resources Simon Sembiring earlier said that the firm would invest US$2 billion in the project. According to him, all related governmental agencies had given their approval on the CoW terms except for taxation terms. (*)