Global miner Rio Tinto Ltd
(ASX:RIO) has been awarded a mining permit to mine nickel at its project on Sulawesi, Indonesia.
According to a report in The Australian newspaper, this is the first permit to be awarded under Indonesia’s new law introduced last year.
While the old system allowed companies greater leeway to negotiate the terms of their contract with the government, under the new system permits expire at a certain time, must be obtained for both exploration and development, limit the size of the mining area and require companies to pay a fixed 10% of profit to local governments.
Rio says it plans to spend $2 billion developing the project, which according to The Australian has a resource of around 162 million tonnes of laterite nickel.
The miner has estimated that the project on Sulawesi has the potential to produce 46,000 tonnes of nickel a year by 2015 ramping up to 100,000 tonnes a year. In 2009 Rio Tinto earned $5.4 billion.
