Rio Tinto seeks change in nickel royalty fee

Anglo-Australian mining giant Rio Tinto Plc has asked the government to make new rules regarding royalty fee for low-grade nickel produced it plans to produce at Lasampala mine in Central Sulawesi.

Director general of geothermal, minerals and coal Simon Felix Sembiring said that Rio Tinto had asked the government for a new royalty rule for low grade nickel as it was not covered in the Government Regulation No. 45/2003 on Tariff on Non-Tax Revenue.

Simon said his office has assigned Tekmira, one of the research and development agencies in the minerals and coal sectors, to study the matter.

Generally, mining companies produce nickel that has above 2 percent grade, while Lasampala nickel's grade is just 0.91 percent.

Rio Tinto and the government are currently negotiating a 30-year Contract of Work (CoW) on Lasampala nickel prospect located in the border of South and Central Sulawesi provinces.

The CoW was initially scheduled for signing in September this year. The signing of the contract has been delayed because the company needs further clarification about the status of the forests in the mining area and the tax system to be adopted. (*)