Press Release: PT Inco plans dam to boost energy and nickel in matte production

JAKARTA, October 7, 2004 ? PT International Nickel Indonesia Tbk today announced plans to raise its hydroelectric power generating capacity by 90 megawatts, or 33 percent, by building a third dam at a cost of approximately US$150 million. The site selected for the dam is in the Company?s Contract of Work area on the Larona River near the village of Karebbe.

?The new dam is stage one of a four-year, approximately $250 million capital program aimed at raising PT Inco?s annual production by 25 percent to about 200 million pounds of nickel in matte by 2009. At the same time, we expect to cut unit cash costs by 7 percent, or about $0.10-to-$0.15 a pound, from the current level of $1.65-to-$1.70 a pound,? said Bing Tobing, President and Chief Executive Officer. ?We?ll reduce energy supply risk in `dry? years while increasing our overall hydroelectric generating capacity to 365 megawatts from 275 megawatts.?

PT Inco?s plans for increasing production have been formally submitted for approval to the Government of Indonesia?s Department of Energy & Mineral Resources and a decision is expected shortly. (end of release)