Rio Tinto looks to bail out of Indonesia JV gold project

Australian miner Rio Tinto is selling its 60 percent stake in Asthon-MMC, which has an 80 percent share in the PT Galuh Cempaka gold and diamond project, an official from PT Aneka Tambang said Tuesday.

Indonesia's PT Antam holds a 20 percent stake in the Galuh Cempaka project. "This project is on trial, and the feasibility study has been extended twice," the official said. "The project has not achieved the budgeted diamond and gold production, but traces of platinum and diamonds were recovered as anticipated," another official from Antam had earlier said. "This is a small project for Rio Tinto, thus they are not too keen," the first official added. "If they (Rio Tinto) cannot find a buyer, then it is likely the project will be closed during the upcoming two quarters," the first official added.

Meanwhile, "since the project is still on trial and not [commercially] operational yet, the ore mined and sent to Jakarta for assessment of the mineral content should not be charged a royalty fee," the Antam official said. The official said the regional administration of Banjabaru's claim of PT Galuh Cempaka owing the regency approximately Rp 3 billion ($262,467) for the ore mined in the area was unfounded. PT Galuh Cempaka is jointly owned by Asthon-MMC ( 80percent ) and PT Aneka Tambang (20percent). Australian miner Rio Tinto has a 60 percent stake in Asthon-MMC, while Malaysian Mining Corp holds 40percent. Galuh Cempaka currently continues to operate under Indonesia's Generation Seven Contract of Work. (*)