Inco production on track despite strike

Ika Krismantari, The Jakarta Post, Jakarta

PT International Nickel Indonesia (Inco) president director Arif S. Siregar said Friday that this year's production remained on track despite a strike at the company's mine in South Sulawesi.

"Although the strike is still ongoing, we will deliver what we promised to the shareholders by achieving our annual production target of 165 million pounds of nickel in matte this year," Arif told reporters after the company's extraordinary shareholders' meeting Friday.

He said that although the strike at the Inco nickel mine in Soroako, South Sulawesi, had disrupted operations, the impact had not been as bad as expected.

According to figures compiled by The Jakarta Post, in the third quarter of this year, Inco produced more than 75 percent of the company's targeted annual production, leaving only 36.9 million pounds to be mined in the last three months of the year.

In the July-to-September quarter alone, the company produced 42 million pounds of nickel in matte, an 11 percent increase from 37.8 million pounds during the same period last year.

The company has set itself a target of producing 165 million pounds of nickel in matte this year, a 4.5 percent increase from last year's 157.9 million pounds.

However, the strike, which has been underway since Nov. 15, could worsen and further disrupt production.

Arif said that between 100 and 200 workers remained on strike at the company's mine, where they were demanding a bigger share of profits.

He said that the workers who had walked off the job represented only a small part of the company's workforce, which comprised 3,500 permanent workers and 3,500 casual workers.

He said the management was still negotiating with the workers.

Meanwhile, regarding the company's plan for a stock split, Inco director for investor relations and corporate secretary Indra Ginting said that Inco would seek approval for the proposal from the shareholders in December.

Under the plan, each of the company's shares listed on the Jakarta Stock Exchange would be split into 10 new shares.

"The stock split will also be subject to approval from the Justice Ministry and the Jakarta Stock Exchange. We hope that it can be carried out in the first quarter of 2008," Indra said.

A stock split is normally carried out by a company to reduce the price of its shares and make them more affordable to investors.

During Friday's midday trading, Inco shares soared by 2.14 percent to Rp 95,500 (US$10.2).

The price of the company's shares have more than quadrupled over the past 12 months, outpacing the Jakarta Composite Index's 71 percent gain.

During the extraordinary meeting, the shareholders agreed to appoint Claudio Renato Chaves Bastos as the company's new chief financial officer, replacing Johannes Cornelis Maria van Gaalen.

The shareholders also approved the appointment of Jennifer Maki and Marco Aurelio Lopes Pires as new members of the board of commissioners, replacing Leonardo Moretzsohn and Mark Cutifani.