Inco requests more time to review $1.8 b nickel project
Ika Krismantari, The Jakarta Post | Fri, 05/08/2009 8:42 PM
The country’s biggest nickel producer, publicly-listed PT International Nickel Indonesia (Inco), is asking the government to give the company two years to once again review the feasibility of US$1.8-billion nickel project in Pomalaa, Southeast Sulawesi.
The request was made after the company submitted the first feasibility study to the government, which showed it was not feasible to currently execute the the smelter project due to the slump in nickel prices, Inco president director Arif Siregar said Friday.
The government has set a deadline of April 30 this year for the company to resubmit the project's feasibility report to prove it is commercially and technically feasible.
However, the major slump in the nickel prices and lower demand for the metal due to the global economic crisis have made the project not economically viable.
“Therefore, we ask for two years to come up with a more comprehensive report and we hope the global nickel market will recover in the meantime,” Arif said, stressing the importance of the project for the company’s future business.
Under the plan, the project will have a annual processing capacity of 30,000 tons of nickel ore and is targeted to be operational by 2013.
Inco investor relation director Indra Ginting said if the two-year extension period was granted, the company would propose a new feasibility report during that time and execute the project as soon as the report showed it was feasible.
“But we can cancel the project, should the study show that it is not viable."
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