INCO plans to export 38,500 tons of nickel

INCO plans to export 38,500 tons of nickel

JAKARTA (JP): Publicly listed PT International Nickel
Indonesia (INCO) announced on Thursday it would increase its
nickel matte exports to 38,500 tons this year from last year's
35,600 tons.

INCO's president and chief executive officer Rumengan Musu
said he expected international nickel prices to improve slightly
in the second half of this year from a low of US$1.54 per pound
($3.4 per kilogram) in the first quarter.

Rumengan told reporters that nickel prices fell sharply early
this year due to a market glut caused by Russia's export of
206,000 metric tons in 1998.

"But INCO's cash flow started to improve in the second quarter
of 1999 due to larger exports and a slight price rise," Rumengan
said, adding that his company exported 21,100 tons valued at
$80.9 million in the first half.

"We are exporting all our production to Japan as nickel matte,
containing 78 percent nickel," Rumengan added.

He said INCO would complete the construction of its third
smelter in September, which would increase its total production
capacity to 68,200 tons.

The third smelter, currently under construction with a
designed capacity of 22,700 tons a year, will be supported by a
new hydroelectric power generator with an installed capacity of
93 megawatts.

"The new smelter and the power generation facility will spend
a total investment of $638 million," Rumengan said.

INCO, which is 58.7 percent owned by INCO Ltd. of Canada and
20.1 percent by Sumitomo Metal Mining Co. Ltd. of Japan, holds a
mining concession of 218,000 hectares in South, Southeast and
Central Sulawesi.

Rumengan said his company was studying the possibility of
establishing a mining joint venture with state-owned PT Aneka
Tambang in a bid to further expand its nickel output.

Aneka Tambang at present operates a ferronickel plant at
Pomala, Southeast Sulawesi.

Its mining contract of work requires INCO to expand its nickel
output in either Pomalaa East in Southeast Sulawesi or Bahadopi
in Central Sulawesi, Rumengan said. (02)