(Corrects tense in headline and syntax in first paragraph of story published yesterday.)
PT International Nickel Indonesia (INCO), the country's largest producer of the metal by value, said output rose last year by more than it had expected in November when the target was reduced after a strike at its Sorowako mine.
Output rose 6.9 percent to 169 million pounds, Corporate Secretary Indra Ginting said by phone today. Workers at Sorowako returned to work on Nov. 26 after a stoppage that prompted a 2.9 percent cut in the full-year target to 165 million pounds.
Nickel prices reached a record $51,800 a metric ton on May 9 last year, boosted by rising demand from China, the world's fastest-growing major economy. The metal, used to strengthen and protect stainless steel from corrosion, has fallen 45 percent since then on higher inventories and a slowdown in demand.
PT Inco, as the mining company is known, plans to produce 165 million pounds to 170 million pounds of nickel in 2008, President Director Arif Siregar said on Dec. 17.
The company, a unit of Brazil's Cia. Vale do Rio Doce, is in talks with the mining ministry to build an acid leach processing plant with an annual capacity of 22,000 tons of nickel in Sorowako, located on Sulawesi island, Ginting said. PT Inco had planned to build one at Bahodopi, also on Sulawesi, to meet requirements set in a contract with the Indonesian government.
``It's not feasible to build the plant in Bahodopi,'' Ginting said. He declined to elaborate.
Nickel for delivery in three months on the London Metal Exchange traded at $28,450 a ton at 5:12 p.m. in London.
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