PT Inco studying use of coal to cut energy cost

Publicly listed nickel miner PT International Nickel Indonesia Tbk is currently conducting a study to replace current usage of HSFO (High Sulphur Fuel Oil) with Indonesian coal to cut higher energy input costs.

“With energy representing about 41% of our costs year to date September 2005, we are trying to mitigate its impact,” the company said in a recent presentation material.

PT Inco said an increase of oil price of US$1 per barrel would be translated to an additional cash cost of about $0.02 of per pound nickel in matte.

Aside from two hydroelectric power plants, PT Inco also operates a 28-megawatt oil fired power plant.

The company uses 3.4 million barrels of HSFO and about 100 million liters of diesel fuel annually. HSFO and diesel represented about $100 million of 2004 costs.

PT Inco produced 159 million pounds of nickel in matte in 2004 and is targeting an equally strong 160 million pounds in 2005.

PT Inco is a 61 percent-owned subsidiary of Canada’s Inco Limited. (Robert)