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. (03)