Inco will not exploit SE Sulawesi's nickel

Inco will not exploit SE Sulawesi's nickel

JAKARTA (JP): PT International Nickel Corporation Indonesia
(Inco), a major Canadian nickel company operating in South
Sulawesi, will only exploit nickel deposits in Soroako, one of
the company's mines in Sulawesi, as the other mines were declared
not to be commercially feasible.

Thomas B. Sitepu, Inco's former finance director, made the
remark yesterday in commenting on Southeast Sulawesi Governor La
Ode Kaymuddin's request to Vice President Try Sutrisno for
reviewing the company's working contract in Southeast Sulawesi,
claiming that Inco had not exploited the province's nickel
deposits.

"With the sluggish nickel prices and nickel oversupply in the
international market we find that exploitation in Southeast
Sulawesi is unfeasible," he told reporters after the annual
shareholders meeting of the company.

At the meeting Sitepu resigned from his post as finance
director. The shareholders appointed Martin. H. Robinson to
replace him and M. V. Whyshynsky to replace Robert Barton as the
director of operations.

However, Sitepu told The Jakarta Post that the company had
increased its capacity in its Soroako mine in South Sulawesi
province from 75.7 million pounds to 100 million pounds annually.

"The capacity increase in Soroako was aimed at anticipating
the company's long term nickel price projection," he added.

The shareholders also agreed on the proposed 1993 dividends at
5 US cents per share to be paid on June 1.

Inco has operated in South Sulawesi since July 1968 under a
working contract which will expire in the year 2008.

Omri Samosir, Inco's Administration Director said that his
company had proposed that the government extend the working
contract for another 15 years.

The company's after tax profit fell from US$36.1 million in
1992 to $10.9 million last year because its net sales decreased
from $192 million in 1992 to $154 million last year.

The decrease in after tax profits and sales figures were
caused by the fall of nickel prices per kilogram from $5.53 in
1992 to $4.27 last year.

The company's production decreased from 36,300 tons of nickel
in matte in 1992 to 34,400 tons last year and its nickel sales
inched upward from 34,300 tons in 1992 to 35,800 tons in 1993.
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