Now that an agreement to extend the contract of work has been signed, P.T. International Nickel Indonesia, a 58.7%-owned subsidiary of nickel giant Inco (TSE), will begin a major expansion program designed to increase nickel-in-matte production by more than 50 million lb.
The contract of work, originally set to expire in 2008, has been extended to 2025 with a provision for a further possible extension.
Inco says the agreement is a tangible demonstration of the excellent relations existing between the subsidiary and the government. Furthermore, the agreement ensures the subsidiary will continue to operate under a fair tax regime for the next 30 years.
As a result of the extension, P.T. Inco will proceed with a US$580-million expansion of its Soroako operations on the Island of Sulawesi. When the expansion is completed in late 1998, annual production should jump by 50 million lb. to 150 million lb. of nickel-in-matte. The increased capacity will enable the company to enhance its position as the leading supplier of nickel-in-matte to the world (especially Asia).
During the fourth quarter of 1995, P.T. Inco produced 27.8 million lb. of nickel-in-matte, which enabled the company to reach a new record production level of more than 100 million lb. per year.
The expansion plan calls for improvements to the three existing production lines, which should increase annual capacity by about 15 million lb.
The Inco subsidiary will increase its low-cost, hydroelectric generating capacity by constructing a US$130-million plant on the Larona River, downstream from its existing, 165-MW hydro plant. The company will also construct a fourth smelting line with an electric furnace, capable of producing 35 million lb. of nickel-in-matte per year.
The expansion will be financed through a combination of debt and internally generated funds.
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