Rio Tinto to invest US$1bn in Sulawesi nickel mining
Energy Minister Purnomo Yusgiantoro confirmed Rio Tinto Group's plan to invest US$1 billion in a nickel mining project in Sulawesi Island.
Rio Tinto is operating gold and silver mines in East Kalimantan through its subsidiary company PT Kelian Equatorial Mining (KEM). Rio owns 90% shares in KEM which produces 500,000 ounces of gold per year. But due to depleted resources, Kelian mining will no longer in operation by next year.
The World's no.3 mining company had been exploring Central Sulawesi through its another subsidiary PT Citra Palu Mineral for its rich resource of gold, coal, nickel, oil, gas and chromium. Citra Palu obtained a work contract from government in 1997 to engage in mining on a 561,050 hectare area.
Citra Palu's exploration activities were subject to protests from the community of Poboya who rejects the company's plan to turn a protected forest park into an open-cut mine. Indonesian environment and human rights NGOs have formed a coalition to oppose mining in protected forest areas, but somehow the government relaxing the regulation and pave the way for resumming such activities in the name of economic growth.
Rio Tinto is studying a laterite deposit containing nickel on Sulawesi Island, Purnomo said. Rio Tinto and central government officials are in Sulawesi to discuss the plan with regional authorities.
Rio Tinto is considering the venture after nickel prices almost quadrupled since 2001 on demand from Chinese steelmakers. Indonesia has about 16 percent of the world's nickel in laterite, which is more costly to process than other deposits. A global commodities boom has increased Rio's profit eightfold in five years, and may prompt $9 billion of spending on mines.
Rio Tinto and Freeport Indonesia have a joint venture agreement that entitles Rio Tinto to 40 per cent of ore mined as a result of the expansion of Grasberg, Papua in 1998 which Rio Tinto helped to finance.
Rio Tinto is operating gold and silver mines in East Kalimantan through its subsidiary company PT Kelian Equatorial Mining (KEM). Rio owns 90% shares in KEM which produces 500,000 ounces of gold per year. But due to depleted resources, Kelian mining will no longer in operation by next year.
The World's no.3 mining company had been exploring Central Sulawesi through its another subsidiary PT Citra Palu Mineral for its rich resource of gold, coal, nickel, oil, gas and chromium. Citra Palu obtained a work contract from government in 1997 to engage in mining on a 561,050 hectare area.
Citra Palu's exploration activities were subject to protests from the community of Poboya who rejects the company's plan to turn a protected forest park into an open-cut mine. Indonesian environment and human rights NGOs have formed a coalition to oppose mining in protected forest areas, but somehow the government relaxing the regulation and pave the way for resumming such activities in the name of economic growth.
Rio Tinto is studying a laterite deposit containing nickel on Sulawesi Island, Purnomo said. Rio Tinto and central government officials are in Sulawesi to discuss the plan with regional authorities.
Rio Tinto is considering the venture after nickel prices almost quadrupled since 2001 on demand from Chinese steelmakers. Indonesia has about 16 percent of the world's nickel in laterite, which is more costly to process than other deposits. A global commodities boom has increased Rio's profit eightfold in five years, and may prompt $9 billion of spending on mines.
Rio Tinto and Freeport Indonesia have a joint venture agreement that entitles Rio Tinto to 40 per cent of ore mined as a result of the expansion of Grasberg, Papua in 1998 which Rio Tinto helped to finance.
Labels: COAL, FREEPORT, Purnomo Yusgiantoro
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