July 25, 2008

Inco plans USD 212 million CAPEX in 2008

It is reported that PT International Nickel Indonesia Tbk Inco plans to more than double its capital spending this year to USD 212 million to help fund a hydroelectric plant and a processing facility in Sulawesi.

Mr Indra Ginting director of investor relations and corporate secretary of Inco told reporters that "We will use our internal cash flow to finance our spending. So far we have not thought of bank loans.”

He added that the budget included spending on the Karebbe dam hydroelectric project in Sulawesi. Construction on the project resumed in the fourth quarter of 2007 after it was suspended in January 2006, pending the issuance of a forestry permit.

The Karebbe dam which will cost USD 275 to USD 280 million is expected to provide an additional 90 MW of power per year and to help boost production to about 200 million pounds of nickel in matte annually.

The company also plans to build a processing facility at Sulawesi's Sorowako to add another 48.5 million pounds of nickel in matte annually using high pressure acid leach process. The project at Sorowako is estimated to cost USD 1.1 billion.

Inco spent USD 102 million on capital spending in 2007.