CORRECTED-UPDATE 1-Indonesia raises Vale nickel royalty, forces share sale
(Corrects Vale's planned smelter investments in sixth paragraph to $4 billion, not $8 billion)
* New nickel contract to raise costs, Vale executive says
* Vale must sell 20 percent of Indonesia unit within 5 years
* Accord with government cuts landholdings by 38 percent
By Wilda Asmarini and Jeb Blount
JAKARTA/RIO DE JANEIRO, Oct 17 (Reuters) - Brazil's Vale SA said on Friday that a revised nickel-mining contract with Indonesia will raise maximum royalties, cut land holdings and require its Indonesian unit to sell another 20 percent of its shares to local investors.
Royalties were set at 2 percent and could rise to as high as 3 percent, more than double the previous 0.6 percent and 0.7 percent, said Nico Kanter, chief executive of Vale's Indonesian subsidiary PT Vale Indonesia TBK.
The royalty hike will "definitely affect our bottom line," Kanter told reporters in Indonesia. He didn't elaborate on the impact. Vale officials in Rio de Janeiro were not immediately available for comment.
Vale which owns 59.2 percent of Vale Indonesia, controls the subsidiary in partnership with Japan's Sumitomo Corp., which owns 20.1 percent, Vale's press office in Rio de Janeiro said. Indonesian investors have already purchased 20 percent of Vale Indonesia. Under the new agreement, the additional 20 percent will have to be sold within five years, Vale said. Continuación...