Govt to sign Inco expansion plan next week

The government is expected to sign an approval for nickel mining company PT International Nickel Indonesia (Inco) to expand its production at its giant mine in Soroako, South Sulawesi next week.

?It (the approval) is likely to be signed next week,? Director General of Geology Mineral Resources at the Ministry of Energy and Mineral Resources Simon F. Sembiring said on Thursday.

The subsidiary of Canadian-based Inco Limited plans to boost its nickel in matte output at Soroako by 25 percent to 200 million pounds by 2009. Under the project expansion plan, PT Inco will also build a third dam on the Larona River to raise its hydroelectric power generating capacity by 90 megawatts or about 33 percent of the existing combined capacity.

The government has demanded PT Inco to pay higher royalty in order to get approval for the expansion plan.

?Inco does not mind paying higher royalty,? Simon said, without providing details.

According to Simon, PT Inco will invest a total of US$290 million for the expansion.

None of PT Inco?s officials are available for comments. (Godang)