Inco cleared for expansion but forestry hurdles remain

South Sulawesi nickel miner PT. Inco is cleared by the government to expand nickel in matte production to 200 million pound in 2009 from 160 million pounds currently but hurdles over protected forest use issue remains to be solved.

?I?ve signed the expansion plan approval,? Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources Simon Felix Sembiring told Petromindo.Com.

Simon said both government and Inco had agreed on new royalty tariff on additional nickel in matte future production, but did not give detail. 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. PT Inco will invest a total of US$290 million for the expansion.

A government official, however, said that Inco still has to face major hurdle to get its expansion plan realized as the proposed development of Karebbe dam is located in protected forest and is located outside the company?s contract of work area

?Ministry of Forestry has issued permit to use the 400-hectares plot to be used to construct the dam, but they attach requirements that are very difficult to be satisfied in the short term,? said the official who asked not to be named. The official added that it would take years to satisfy the requirement and could put expansion plan in jeopardy. The official said that the Ministry of Energy and Mineral Resources and Inco are lobbying the Ministry of Forestry to get the decree amended or at least to allow the company to start construction while at the same time gradually fulfilling the ministry?s requirements. (godang)