Inco to expand Indonesian operation

Responding to the growing demand for nickel in the Far East, Inco (TSE) has decided to expand its production facility in Indonesia.

The plan, estimated to cost US$500 million, calls for Inco’s 58%-owned subsidiary, P.T. International Nickel Indonesia (PT Inco), to increase annual production by 50%, to about 150 million lb., by the year 2000. The announcement coincides with Prime Minister Jean Chretien’s participation in the recent summit conference of leaders of the Asia-Pacific Economic Cooperation (APEC).

As a result of the expansion, PT Inco, already one of the lowest-cost nickel producers in the world, will be the third-largest nickel producer on the globe. It is superceded only by Norilsk in Siberia and Inco’s own operation in Sudbury.

The Indonesian complex is in Soroako on the island of Sulawesi. In this, its 26th year of operation, PT Inco expects to produce 100 million lb. of nickel matte. The matte, containing 77-80% nickel, provides a stable source of feed material to Japanese nickel refiners, free from existing Japanese tariffs levied on imports of finished nickel products. The project involves enlarging the open-pit mine at Soroako and adding a fourth production line to an existing three at the adjacent smelter complex. In addition, Inco plans to increase its hydroelectric facilities on the Larona River.

PT Inco currently holds 218,529 hectares covering four major and several minor zones in the provinces of South, Central, and Southeast Sulawesi. These areas are believed to contain sufficient lateritic reserves to support production at expanded rates for more than 50 years. At Dec. 31, 1993, proven and probable reserves at Soroako stood at 86 million tons grading 1.86% nickel (1.6 million tons of contained nickel).

The company is also exploring areas peripheral to the mining operation, especially in the vicinity of Pomalaa East and the Soroako Outer area. Preliminary evaluations at Pomalaa East indicate a possible resource of 162 million tons. At least 50 million tons of this material, grading 1.9% nickel, can be classified as a minable reserve.