Rio Tinto waiting for the passage of new mining law to invest in Indonesia

Mining company PT Rio Tinto Indonesia will not make new investment in Indonesia until the promulgation of a new mining law, according to company president Noke Kiroyan.

Kiroyan said the company could not yet make investment plan because of the uncertainty arising from the implementation of regional autonomy and the drafting of the new mining bill.

He acknowledged that as long as the new mining law has not yet produced by the government together with the House of Representatives, the existing mining law will still be valid to govern all mining issues in the country.

However, he said, such a situation only created uncertainties for mining activities in the country.

"Our investment this year will only to purchase materials to replace machinery and other production installation whose economical lives have expired," he said.

Kiroyan added that the company's new investment would also be influenced by security situation in the company's operation areas as well as the readiness of officials at local administrations to assume increased regional autonomy duties.

Speaking about the company's performance, Kiroyan noted that the company booked a stable performance during the past two years.

He said the company's output fell 10 percent last year, simply because of labor strike at its subsidiary PT Kaltim Prima Coal (KPC) in East Kalimantan. KPC stopped operation for 44 days last year because of the labor dispute.

KPC, 50 percent controlled by Rio Tinto, produced 13.5 million tons of coal last year, or 1.5 million tons lower than the target. (*)