Rio Tinto Group, the world`s third-largest mining company, and the Indonesian government have agreed on royalty payments for a planned US$2 billion nickel project, an official said.
The government will get 1.5% of revenue from nickel-in-concentrate and 0.75% from refined metal, Simon Sembiring, director general of coal and mineral resources at the energy ministry, said by text message.
A Rio spokesman confirmed an agreement was reached, without giving royalty figures.
Indonesia is trying to win US$22 billion in investment a year to power Southeast Asia`s largest economy, rich in coal, copper and nickel.
Funds committed by miners to explore for Indonesian deposits, outside existing mines, totaled US$7 million in 2005, unchanged for five years, according to PricewaterhouseCoopers.
"We will now concentrate on negotiations with the finance ministry on taxes and other fiscal arrangements," Budi Irianto, spokesman of Rio Tinto`s Indonesian unit, said by phone.
The company`s proposed mine in Sulawesi is estimated to produce as much as 50,000 t of nickel a year from 2012.
(May 2 Bloomberg)
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