Bloomberg News

PT Inco to Resume Work on Power Plant After Forestry Clearance

October 01, 2007

PT International Nickel Indonesia (INCO), the country's largest producer of the metal, said it will restart construction of a $285 million power project in Sulawesi after a 20-month delay.

The resumption of work on the Karebbe hydroelectric power plant, suspended since January 2006, came after the Forestry Ministry in August gave the company a permit to use part of a forest, PT Inco said in an e-mailed statement today.

PT Inco, as the Jakarta-based company is known, wants to boost nickel output to benefit from rising demand for the metal used in stainless steel. It also wants to cut costs to further boost earnings.

The Karebbe project may raise hydroelectric generating capacity to 365 megawatts from 275 megawatts, reducing the cash cost of producing each pound of nickel by 10 cents to 15 cents, the company's 2006 annual report said. Inco plans to increase nickel output to 200 million pounds in 2010 from a targeted 160 million pounds this year, the company has said.

Nickel for delivery in three months on the London Metal Exchange rose to a record $51,800 a metric ton on May 9. The metal closed at $30,500 a ton on Sept. 28.

PT Inco is a unit of Cia. Vale do Rio Doce, the world's largest iron-ore producer.

The statement didn't give an exact date when construction will resume. Sri Kuncoro, PT Inco's director of corporate external relations, was not immediately available when Bloomberg contacted his office in Jakarta.

To contact the reporter on this story: Naila Firdausi in Jakarta at

To contact the editor responsible for this story: James Poole

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