Inco earmarks $120m in capital expenditure to boost production
Inco earmarks $120m in capital expenditure to boost production
Leony Aurora, The Jakarta Post, Jakarta
Publicly listed PT International Nickel Indonesia (Inco), a local
subsidiary of the world's second-largest nickel producer Inco
Ltd., plans to invest US$120 million in capital this year as it
continues the construction of a new hydropower plant.
Some $50 million of the capital expenditure would go to the
dam project in Karebbe, Southeast Sulawesi, director Raymond
Westall said on Wednesday.
"The rest is for the maintenance and environmental-related
projects," he said.
Inco began the 90-megawatt hydropower plant to boost the
company's output capacity to 200 million pounds of nickel matte
by 2009.
Last year, Inco produced 159 million pounds of nickel from a
number of nickel mines, notably in its giant mine in Sorowako,
also in Southeast Sulawesi.
It targets a slight rise in output this year to 160 million
pounds.
President Bing Tobing said the hydropower plant, which would
be the company's third, would cost a total of $250 million over
four years.
He also announced that the shareholders meeting had approved a
final dividend of 9.75 U.S. cents a share for 2004, which would
be paid on May 10. The company paid an interim dividend of 1.25
cents a share on Nov. 25 last year.
Higher nickel prices and record-setting production boosted
sales last year and more than doubled Inco's net profit to $265.1
million from $104.2 million the year before.
Sales revenues jumped 56 percent from $509 million in 2003 to
$792.1 million the following year.
Bing was convinced that nickel prices would remain strong this
year as demand from producers of stainless steel and other alloys
in China continued to grow.
"The (global) nickel supply is still below demand," he said.
Nickel in 2004 averaged at $10,766 a ton, or $4.88 a pound, up
51 percent from an average of $7,117 per ton, or $3.23 per pound,
in 2003 based on the benchmark prices at the London Metal
Exchange.
On Wednesday, Inco shares in the Jakarta stock exchange fell
4.3 percent, about Rp 600, to close at Rp 13,300.