Rio Tinto sues regency over mining rights

Anglo-Australian mining giant Rio Tinto has filed a lawsuit against the adminisration of Morowali regency, Central Sulawesi over the latter's move to award a mining concession to local companies.

This comes after the local administration granted mining rights to local companies in an area the company says is still the subject of ongoing negotiations between itself and the regency.

The lawsuit was filed on Friday at the Administrative Court in Palu, Central Sulawesi.

?We want Morowali regency to revoke the licenses they gave to the local mining companies, and we hope they still want to resume negotiations with us,? Budi Irianto, Rio Tinto?s manager of external affairs, said Monday, as reported by The Jakarta Post.

Rio Tinto has been in negotiations with the Central Sulawesi provincial administration since 2006 over a mining contract in Lasamphala, a 73,000-hectare area that borders Morowali and Konawe regencies in Southeast Sulawesi.

?We were shocked to learn the Morowali regency gave the mining rights to local companies when we are in the middle of negotiations with them,? Budi said.

Budi said the regency?s decision breached a 1999 government decision approving Rio Pinto?s application to mine the area.

In April 2007, the government issued a second approval, in the form of a contract of work, but the decision was not implemented because it required the local administration?s approval.

Rio Tinto plans to invest between $1.5 billion and $2 billion to develop the concession's nickel resources, which it claims to be one of the best undeveloped nickel resources in the world. (*)