Inco?s Q2 nickel in matte production steady as fuel costs increase sharply
Wednesday, July 27 2005 - 12:27 AM WIB
The company said that PT.Inco?s lower finished nickel production was due to the timing of certain shipments of PT Inco's nickel matte product and to the scheduled maintenance shutdown at Inco?s nickel refinery in Japan on April 2005. PT.Inco ships its production in the form of nickel in matte to overseas refineries.
PT.Inco produced 38.1 million pounds of nickel in matte during the fisrt quarter of 2005.
The company said the 41 million pounds of nickel in matte production was reached despite a major installation of new environmental equipment to reduce dust emissions on one furnace at PT Inco.
PT.Inco is expected to produce 160-162 million pounds of finished nickel as targeted this year.
Inco said its Indonesian operations is facing costs increases mainly due to high heavy fuel oil and diesel prices Cost estimates for heavy fuel oil was raised by 30 percent for the second half of 2005, from $28.25 a barrel to $35.50 a barrel, including hedges.
PT.Inco uses 3.4 million barrels of heavy oil annually. The government raised the domestic diesel fuel price for mining companies by 115% to about $0.48 a litre, effective July 1, 2005. PT Inco consumes more than 100 million litres of diesel fuel annually.
The company said expansion program at PT.Inco, which included a third hydroelectric dam on the Larona River, would enable PT.Inco to increase production and will reduce energy supply risk in ?dry? years. PT.Inco would spend $275-to-$280 million to raise production and hydroelectric power output. ?The third dam will give us an extra 90 megawatts of power, take us to about 200 million pounds of nickel in matte annually by 2009 and lower nickel unit cash costs by $0.10- to-$0.15 a pound. We expect to receive the final government approvals soon that will allow us to begin major construction later this year,? Inco said.
Inco has 61 percent shares in the JSX-listed PT.Inco. (alex).