Rio tax accord for Sulawesi mineRIO Tinto said it has reached...

Rio tax accord for Sulawesi mine

RIO Tinto said it has reached agreement with Indonesia on all important tax clauses for its planned $US1.5 billion ($1.6 billion) nickel project in Sulawesi.

"The agreed clauses are based on a combination of fixed rates and prevailing regulations," said Mike Jolley, president director of Rio Tinto Indonesia, in a media release without elaborating. "This will provide sufficient certainty to Rio Tinto to support a multi-billion dollar investment."

Mr Jolley said that the next phase will be to finalise the clauses with the provincial and regional governments on community development.

When the negotiations with regional governments are completed, the contract will then be submitted to the parliament for review, he added.

Rio Tinto's project would be the first major mining investment in Indonesia in several years. It could help put Indonesia back on the radar of international mining investors after a lack of legal certainties led to their shunning the resource-rich country.

Rio Tinto said it considers the Sulawesi nickel deposit to be one of the best undeveloped nickel resources in the world. The Anglo-Australian mining company said it plans to produce about 46,000 tonnes of nickel per year initially, adding production can potentially increase to about 100,000 tonnes.

The project will include the construction of an access highway and a new seaport on the east coast of Sulawesi