Inco to invest US$1.5b to boost smelter capacity

PT International Nickel Indonesia Tbk (INCO) plans to invest up to US$1.5 billion in the next five years. The funds will be used to boost the nickel smelter capacity from 72,000 tons per year at present to 120,000 tons per year.

President director of Inco, Tony Wenas, said that the plan to raise capacity is in response to nickel rising demand. The ultimate capacity increase is expected to be reached by 2016.

Tony said the plan will go ahead and will not be affected by his decision last week to resign from the company. Inco is scheduled to hold shareholders extraordinary meeting in September to approve Tony?s resignation and appoint his successor.

Tony said Inco is currently developing two projects aiming at boosting the smelter?s output. The first step is rebuilding and adding new furnace and secondly, developing the Bahodopi Block in Central Sulawesi. Inco plans to build one new furnace in the next years with estimated total cost of US$ 1 billion.

In addition, Inco also plans to build screening station, dryer plant and refinery with estimated cost of around US$ 500 million.

Tony said Inco will also modify one furnace in Soroako smelter plant, South Sulawesi in October this year. The project is expected to be completed in 21 weeks. At present Inco has four furnaces at its Soroako plant.

Inco expects its capacity to increase to 90,000 tons per year in 2014 and further increase to 120,000 tons in 2016. Inco may build nickel smelter in Bahodopi nickel project, pending on the availability of electricity. Otherwise, nickel ore from Bahodopi will be sent to its smelter plant in Soroako.

Tony added Inco?s hydropower plant (PLTA) Karebbe in Malili, Luwu Timur Regency, South Sulawesi with capacity of 90 MW will commence operation this year. ?Of the two turbines, one turbine has begun operating. The operation of the hydropower plant will reduce our production costs,? he said. (*)