PT Inco sees mid-year construction start for Indonesia’s 90-MW Karebbe

PT International Nickel Indonesia Tbk. (PT Inco) said March 30 it expects to invest US$36 million in 2007 on the 90-MW Karebbe hydroelectric project on the Larona River in Indonesia’s South Sulawesi Province.

Although PT Inco, a unit of Canada’s Inco Ltd., announced plans in 2004 to build Karebbe, its third hydroelectric project, work was suspended in January 2006, pending finalization of a forestry permit.

PT Inco said in its annual report that it expects the permit to be completed in the first half of 2007, allowing work to resume in mid-year. If that is the case, the nickel miner expects to complete the project in the first half of 2010.

In late 2006, PT Inco said the permitting delay and increases in major commodity prices would make the capital cost of the project exceed its previous estimate of US$275 million to US$280 million. It said a new capital cost will be calculated once permitting is complete.

Karebbe is to increase PT Inco’s generating capacity 33 percent to about 365 MW. It is part of a capital program to raise its annual nickel production by 25 percent to 200 million pounds of nickel in matte.

Karebbe is to join other PT Inco hydro projects on the Larona River, 167-MW Larona and 109-MW Balambano.

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