PT Inco on schedule to deliver nickel ore despite Antam's smelter trouble

PT International Nickel Indonesia Tbk is still on schedule to start delivering nickel ore from its East Pomalaa mine in Southeast Sulawesi to smelting facilities operated by state-owned mining firm PT Antam Tbk in Pomalaa in June despite interruption at one of Antam?s ferronickel smelting plants.

?We heard about what happened with Antam?s FeNi (ferronickel) II, but we have yet to receive a notification from the company for a rescheduling,? PT Inco corporate external relations director Sri Kuncoro said in a media briefing on Tuesday.

PT Inco and Antam have signed a Cooperative Resources Agreement to develop a total of 10 million tons of nickel deposits within the Contract of Work area held by PT Inco in East Pomalaa, Kolaka regency.

The development of East Pomalaa nickel deposits is an assurance of around one million tons per year of nickel ore feed for Antam?s smelting facilities following a depletion of nickel reserves at Antam?s Pomalaa mines.

Antam announced recently that it had halted the commissioning of FeNi II for safety reasons. The shutdown of the FeNi II is expected to last for five to six months and it is expected to resume commercial operations at the end of August 2005.

Antam has decided to increase the amount of toll smelting at Pacific Metals Co. (Pamco) of Japan from 150 tons to 600 tons of contained nickel in ferronickel.

Kuncoro said the deal did not specify that the ore should be processed at Antam?s smelting facilities at Pomalaa.

Kuncoro added that PT Inco targeted to deliver up to 500,000 tons of nickel ore to Antam?s facilities by end of 2005.

Antam operates two smelting plants with capacity to produce approximately 5,500 tons of ferronickel each.

The company is also constructing another smelter, the FeNi III, and is expected to start operation in the first quarter of 2006. This plant will consume around one million tons of nickel ore per year to produce around 15,000 tons of ferronickel. (Robert)