P.T. Inco sale going as planned, says Phillips

The sale of 20% of P.T. International Nickel Indonesia is proceeding on schedule, Inco (TSE) Chairman Donald Phillips told a group of mining analysts in New York. As a result of the sale, Inco should receive after-tax proceeds of about US$240 million in mid- May and be able to add earnings of US$125 million to its second- quarter results. The sale fulfils a commitment made by Inco to the Indonesian government in 1968, giving Indonesians the opportunity to purchase up to 20% of the shares of P.T. Inco.

Phillips also noted that even with nickel price realizations as low as US$2.65 per lb., Inco would have achieved break-even pretax earnings during 1989. This calculation is based on many variables, including earnings from sales of copper and precious metals, research, development and exploration expenses, corporate expenses and other income. This break-even price should not be confused with the cost of producing a pound of nickel, which is considerably lower, he added. Inco’s actual realized price for nickel in 1989 was US$5.61.