PRESS RELEASE - PT International Nickel Indonesia Tbk defers interim dividend; focuses on consolidating financial gains

The Board of Commissioners of PT International Nickel Indonesia Tbk decided at its meeting in Toronto, Ontario, Canada on September 28, 2000 to defer the Company's interim dividend in respect of 2000 pending consideration of the Company's final dividend for 2000. President Commissioner Scott M. Hand noted that the Board's decision had been made on the basis of the Company's need to continue its focus on consolidating its financial gains and that the Company's net cash flow, after required debt repayments, was not sufficient at this point in time to support an interim dividend.

In reaching its decision to defer the interim dividend, the Board noted the substantial financial progress the Company had achieved for the first half of 2000. As previously reported, the Company's net earnings for the first half of 2000 were US$47.3 million, or 19 cents per share, compared with US$2.0 million, or one cent per share, in the corresponding period of 1999. This increase in net earnings, relative to the corresponding 1999 period, was due to significantly higher nickel prices and higher deliveries, partly offset by higher fuel costs. As also previously reported, cash flow from operations, before debt service and capital expenditures, was $58.3 million, more than double the level achieved in the first half of 1999. Production from the Company's recently completed expansion contributed significantly to this operating cash flow and is anticipated to do so to an even greater extent as the Company moves toward full production capacity from the expansion.

Completion of the expansion project also marked, however, the beginning of significant semi-annual repayments of debt incurred to finance the project. As a result, the Company's net cash flow after debt service and capital expenditures was only $1.3 million for the first half of 2000. With a cash balance of $3.5 million at the end of the first half of 2000, and given the Company's continuing debt repayment requirements and planned capital expenditures over the remainder of 2000, the Board of Commissioners determined that the interim dividend for 2000 should be deferred. Should nickel prices continue at current higher levels and the Company achieve planned production increases resulting from the expansion, improved operating cash flow and reduced debt levels should contribute to stronger net cash flow over the near term.

The Board of Commissioners will consider the Company's final dividend for 2000 at its next meeting scheduled for April 2001. (*)