Signing Rio Tinto CoW likley delayed

The government has delayed the signing of the contracts of works for Rio Tinto's US$1 billion mining project in La Sampala, Central Sulawesi until all impeding issues such as taxation and the status of forest area in the mining site are cleared.

Simon F. Sembiring, the director general of mineral, coal and geothermal at the ministry of energy and mineral resources, said in Jakarta Wednesday that the government initially planned to sign the contracts in September but it could not made it according to the plan because there was still a problem related to taxation and the status of the forest area in the mining site.

He said that the signing still waited for the issuance of the tax formula for the mining site, in addition to the forestry ministry's final say on the status of the forests on the mining site.

"Rio Tinto wants the government to implicitly state in the contact that the forestry area will not be turned into a protect forest when it has begun the operation. We understand the company's request because no company wants to invest if there is no certainty about the status of their mining site," he said, adding that the request had been submitted to the forestry ministry but the latter still refused to meet the demand.

Rio Tinto expressed its optimism that the company and the government would sign a 30-year Contract of Work (CoW) on La Sampala nickel prospect despite the lingering problem related to taxation regime and status of their mining site.

"I think the sooner the better," Rio Tinto's deputy for external relations Anang Rizkani Noor told Petromindo.com.

Anang said that Rio Tinto's interest in investing in nickel in Indonesia remain strong. "Principally, Rio Tinto will invest (in Indonesia) as long as it is secure and the lingering problem can be solved soon," he said.

La Sampala nickel prospect located in the border of South and Central Sulawesi provinces (godang /denny)