Inco's profit in H1 up by 13%
Leony Aurora, The Jakarta Post, Jakarta
Publicly listed nickel miner PT International Nickel Indonesia (Inco) has reported a 13 percent rise of unaudited net profit in the year's first semester to US$141.9 million from $126 million the previous year on strong global prices.
Sales jumped by 18 percent to $434.3 million in the first half of the year from $369 million booked in the corresponding period last year, the company said in a statement released on Wednesday.
Nickel in matte production rose by a mere 3 percent to 79.3 million pounds in the first six months of 2005 from 77.3 million pounds in the same period in 2004. From the total output, some 77.2 million pounds were sold as against 75.4 million pounds.
"Inco is on track to achieve its production goal for 2005 of 160 million pounds of nickel in matte," president director Bing Tobing said in the statement.
The Sulawesi-based nickel producer is enjoying a continued rise in prices on the international market, driven by growing demand from producers of stainless steel and other alloys in China and the U.S.
Inco's realized price for the commodity averaged $5.85 per pound, or $12,897 per ton, in the second quarter of the year, compared with $5.15 per pound in the first quarter and $4.88 a pound on average throughout last year.
The Indonesian unit of the world's second largest mining company Inco Ltd. operates a giant nickel mine in Sorowako of Southeast Sulawesi with two dams to support the existing production process.
The company plans to build another 90-megawatt hydropower plant in Karebbe in the province to support its efforts to boost output capacity to 200 million pounds of nickel matte by 2009 -- although the plan is still subject to the government's approval.
The four-year dam construction project is estimated to cost up to $280 million.
The government has insisted that in turn for a permit to mine more nickel, Inco should double its royalties -- if nickel prices stand higher than $3.50 per pound. The higher royalty will apply only for the additional output.
At present the company pays the government 1.5 U.S. cents in royalty for every kilogram of nickel sold.