Inco Ltd to extend RI deal

Inco Ltd to extend RI deal

TORONTO (Reuter): Inco Ltd expects to sign an extension to its work contract at its 58-percent owned PT International Nickel Indonesia next week during Canadian Prime Minister Jean Chretien's Asian trade mission.

The original expiry date for the contract, required for all foreign companies operating in Indonesia, was 2008 but Inco reached agreement in principle to extend it to about 2025 with provision for further extension, Inco spokesman Bob Purcell said.

The signing date is set for the week of Jan. 15 during Chretien's trade mission to Asia. Chretien is scheduled to visit Jakarta on Jan. 16 and 17.

Purcell said the extended contract revises some of the tax breaks previously allowed by the Indonesian government.

"We had a lot of lean years at PT Inco in the early years, but now we're turning a profit," Purcell said.

PT Inco produced a record 100 million pounds of nickel matte in 1994. Net earnings rose to US$31.6 million for the third quarter this year and US$70.6 million for the first nine months compared to US$8.6 million in the third quarter and US$24.7 million for the first nine months of 1994.

An C$500 million expansion is underway to boost ouptput by half to about 150 million pounds of nickel matte per year.