Indonesia sends team to Brazil for Redd+ program

Antara News, Thursday, May 27, 2010 03:57 WIB

Oslo (ANTARA News) - The Indonesian government has sent a team to Brazil to see from close quarters the implementation of the forest conservation cooperation program by way of the REDD+ mechanism there.

The statement was made by President Susilo Bambang Yudhoyono at the Norwegian Government Guest House in Oslo on Wednesday afternoon local time after witnessing the signing of Letter of Intent (LoI) on reducing emissions caused by deforestation and forest degradation (REDD+) between Indonesia and Norway worth 1 billion US dollars.

"Indonesia will send a team to Brazil as a comparison in the implementation of the program (REDD+) in Brazil," the President said.

Indonesia, he added, will especially focus on the mechanism of control and measuring the effectiveness of the program, so that Norway will act the same in implementing the program both with Indonesia or Brazil.

The Indonesian and Norwegian governments signed a deal worth one billion US dollars for cooperation in reducing emissions caused by reforestation and forest degradation.

Signing for Indonesia was Foreign Minister Marty Natalegawa and Norwegian Environment and International Development Minister Erik Solheim who acted for his government in the presence of President Yudhoyono and Prime Minister Jens Stoltenberg.

Jens Stoltenberg said under the agreement Norway is committed to support Indonesia`s efforts in preserving its forests at a cost of one billion dollars provided in three stages.

"The contribution will be based on reducing forest felling. Therefore, monitoring and verification are a key to make sure that progress is being made in reducing forest felling," he said when underlining the importance of control.

President Yudhoyono was among others in the company of Chief Economic Minister Hatta Rajasa, Environment Minister Gusti Muhammad Hatta, Minister of Forestry Zulkifli Hassan, Sports and Youth Minister Andi Mallarangeng, and Presidential spokesmen Dino Patti Djalal and Julian A. Pasha.

After the bilateral meeting, Stoltenberg will entertain the President and his wife Madame Ani Yudhoyono and entourage at a dinner.

Govt to set up three SEZs for agribusiness

Aditya Suharmoko, THE JAKARTA POST, JAKARTA | Sat, 02/06/2010 1:03 PM | Business

The government is aiming to attract less than Rp 100 trillion (US$10.6 billion) in investment through the development of three special economic zones (SEZs) producing agricultural products this year.

The three zones will be located in Medan, North Sumatra, in Dumai, Riau, and in Merauke, Papua, Vice Agriculture Minister Bayu Krisnamurthi said Friday at the Coordinating Economic Ministry.

Medan, which produces crude palm oil (CPO), may attract Rp 12.5 trillion in investment, he said. "PT Perkebunan Nusantara III will provide 800 billion in initial investment."

Dumai needs Rp 20 trillion in investment for CPO production, Rp 2.5 trillion to come from PT Wilmar International Ltd., Bayu added.

"We want to increase CPO production, and raise CPO's added value by developing downstream industries. The SEZ approach is used to make private investors interested in developing downstream industries in a zone by using existing raw materials," he said.

Indonesia wants to develop half-processed goods to be sold abroad rather than sell raw materials.

Bayu said Indonesia expects to produce 40 million tons of CPO in 2020, almost double from 20 million tons targeted this year.

Merauke needs Rp 60 trillion in investment to become a food estate, producing various agriculture products, said Bayu.

"We're preparing land of 1.62 million hectares, suitable for food estate. But we initiate by developing from 500,000 hectares. In the first year we will start from 100,000 hectares," he said.

Bayu said the government would help develop supporting infrastructure in Merauke to ensure the region is ideal as an economic zone and viable for both domestic and foreign investment.

"Merauke is still *underdeveloped* so it needs a large initial investment of between Rp 2.5 trillion and Rp 3 trillion," Bayu said, adding that 32 investors from domestic and abroad such as the Middle East, Japan, Brazil and China were interested.

Vice President Boediono said Thursday the government would closely look at spatial planning to ensure more land for agricultural use, according to the Indonesian Chamber of Commerce and Industry.

Research from the Agriculture Ministry shows Indonesia has 190 million hectares of land, 101 million suitable for agricultural use. Now 64 million hectares is used for farming.

President Susilo Bambang Yudhoyono said the government would focus on 10 strategic and key commodities to feed Indonesia and the world.

Coordinating Economic Minister Hatta Rajasa said the government would cooperate with regional governments to build infrastructure in the three zones.

"Investment appetite is high. I am positive in 2010 investment will grow," he said, adding that the government has met with representatives from Japan and the US.

According to the National Development Planning Agency (Bappenas), Indonesia has identified six economic corridors - Eastern Sumatra-Northwestern Java, Northern Java, Kalimantan, Western Sulawesi, East Java-Bali-East Nusa Tenggara and Papua - to be developed through public-private partnerships.

Each corridor has its own focus industries.

Bappenas said Indonesia would need almost Rp 2,000 trillion in investment between 2010 and 2014 for infrastructure development.

Joint venture to produce biofuel in Brazil

Radio Netherlands Worldwide, 1 February 2010 - 3:33pm

Sugarcane field

(first generation biofuel)

Shell plans to enter into a joint venture with the Brazilian ethanol producer Cosan. The two companies have signed a declaration of intent for the production, distribution and sale of ethanol in Brazil.

Brazil makes widespread use of ethanol made from sugarcane as a biofuel. This will be the first time that Shell has been involved in the production of biofuel. The energy company believes that biofuels are the most realistic replacement for petrol in the transport sector in the next 20 years. Shell aims to invest 1.6 billion dollars in the joint venture in the next two years. The enterprise is intended to become market leader in Brazil, with 4500 points of sale and an annual production of 17 billion litres.

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Norway launches country group to fight deforestation

Google/AFP

OSLO — Norwegian Prime Minister Jens Stoltenberg said Tuesday he would put together a group of the world's most important rainforest countries in order to fight deforestation.

The group, initiated "as part of our efforts to reach a binding climate agreement in Mexico in 2010," will consist of "the most important rainforest countries, among them Brazil, Indonesia, Guyana, Gabon, Papua New Guinea and others," Stoltenberg said in a statement.

"Developing countries represent 17 percent of the total emission of greenhouse gases," he said, adding "efforts related to rainforests may lead to one third of the emission cuts needed by 2020."

Norway, one of the world's leading oil and gas exporters, has made the fight against deforestation one of its top climate change priorities.

The Scandinavian, non-EU country argued Tuesday that reducing deforestation may lead to the "largest, quickest and cheapest cuts in greenhouse gas emissions."

At the UN Climate summit in Copenhagen, Norway said it would unblock one billion dollars as part of a 3.5 billion dollar aid package to fight deforestation, put together by the United States, Britain, France, Australia and Japan.

The Norwegian prime minister, speaking at his bi-annual press conference, said the deal reached in Copenhagen had "great weaknesses" but that it was an "important step" in the fight against climate change.

Stoltenberg said two of the greatest weaknesses of the last-minute deal reached in Copenhagen were the lack of numbered targets for the reduction of greenhouse gas emissions and the absence of a legally binding agreement.

He however lauded the international consensus of world leaders to tackle climate change, the involvement of emerging countries, developed countries' financing promises and control measures.

Petrobras eyes Australia, Indonesia gas opportunities

By Judy Hua, Reuters, Fri Feb 27, 2009 10:08am GMT  

SINGAPORE, Feb 27 (Reuters) - Brazil's state-run energy giant Petrobras (PETR4.SA)(PBR.N) is seeking opportunities for natural gas in Northwest Australia and Indonesia, to expand its energy investments in Asia, a company official said on Friday. 

Petrobras, which gets most of its output from the Americas, has put aside almost $16 billion for its international business in the next five years, and has been spreading its wings by boosting oil exports to China and acquiring a refinery in Japan. 

"Asia can be considered a new frontier for Petrobras. Asia represents lots of opportunities for Petrobras because we need gas and there are gas in Southeast Asia," said Simone Totti Davidovich, Senior Adviser of E&P International Business Development of Petrobras. 

"The countries we are focusing on are mainly Australia and Indonesia. Those are the most important countries, but we are not close to those countries," she told Reuters on the sidelines of an upstream oil and gas conference. 

Davidovich said Petrobras was talking to some firms but did not elaborate on the opportunities it was looking at. 

"We are talking to some companies and we have seen some blocks. I hope it's not that far away. I hope it's in near future." 

Among companies working in natural gas developments in Western Australia are Chevron (CVX.N), Apache Corp (APA.N), Woodside Petroleum (WPL.AX), ENI (ENI.MI) and BHP Billiton (BHP.AX) in a joint venture with Exxon Mobil Corp (XOM.N). 

Petrobras has no oil and gas exploration deals so far in East Asia and Australia. It holds upstream interests in Pakistan and India to explore offshore blocks. 

The company unveiled in January a huge plan to invest $174 billion between 2009 and 2013, up 55 percent from the $112 billion planned for 2008-2012, bucking the wider trend of oil firms cutting their spending amid the economic downturn. 

Davidovich said of the total investment, $15.9 billion would be for its international business, of which 20 percent would go to new businesses, including Asia Pacific. 

NEW FRONTIER 

Indonesia, Southeast Asia's biggest economy, has been offering new exploration rights and financial incentives in a bid to stem an output decline, and is targeting a 50 percent rise to $2.7 billion in spending from oil contractors this year. 

But there could be some obstacles for foreign firms to explore oil and gas in Indonesia, such as the production split. 

"Definitely it's hard to find something interesting with those terms, but it's not impossible. That's why there are so many companies there," Davidovich said. 

"If there are positive returns, we will do that." 

Only last week Brazil signed an agreement with China to supply 100,000-160,000 barrels of oil per day and expects to obtain up to $10 billion in Chinese loans to help develop its huge oil reserves to ensure future oil supplies. [ID:nN19512811] 

In November, Petrobras said it was in talks with top Asian oil refiner Sinopec (0386.HK) on taking a refinery stake in China, but there have been no concrete developments yet as companies face higher costs. 

Petrobras said last year it aimed to upgrade its newly acquired Nansei Sekiyu K.K. refinery.

 (Editing by Ramthan Hussain)

Companies Propose $4.09 Billion Worth of New Smelters

Reva Sasistiya, The Jakarta Globe, January 6, 2009 

Several companies have submitted proposals to the government to build five new nickel and copper smelters valued at $4.09 billion this year, just weeks after the House of Representatives passed the mining law on Dec. 16, an official at the Ministry of Energy and Mineral Resources said on Tuesday. 

Simon Felix Sembiring, the ministry’s senior finance and economic adviser, said the new mining law could help investment in the mining sector eclipse the government’s target of $2.1 billion in 2009. 

Construction of some of the newly proposed smelters, however, may not start this year. 

“As one of the world’s biggest producers of mineral resources, we don’t want our raw materials to be exported overseas for processing,” Simon said. The energy ministry said investment in the mining sector reached $1.6 billion in 2008, up from $1.25 billion in 2007. 

Under the new legislation, mining companies with operations in Indonesia are required to process raw materials locally, rather than exporting them to be processed in other countries, as they were permitted to do under the old legislation. 

Companies can choose to either build their own smelters or send materials to existing domestic smelters. 

Soemarno Witoro Soelarno, secretary at the Directorate General for Mineral, Coal and Geothermal Resources at the energy ministry, said the new investment proposals included plans by PT Nusantara Smelting to build a $1.04 billion copper and nickel smelter in Bontang, East Kalimatan Province, and a proposal by PT Gresik Smelting to build a $1.4 billion copper-cathode smelter in Gresik, East Java Province. 

“Investors are now conducting feasibility studies before starting construction,” Witoro said on Tuesday. 

Juangga Mangasi, director of Nusantara Smelting, said in December that the company may postpone the construction of its smelter to 2010, however, due to the credit crunch and the plunge in metals prices in the fourth quarter of 2008. 

State-owned PT Aneka Tambang Tbk is also planning to invest $1.65 billion to build three aluminum and iron-ore smelters in South Kalimantan Province, Tayan, West Kalimantan Province, and Bintan, Riau Islands Province. 

Ten other investors are also considering smelter investments. Anglo-Australian miner Rio Tinto has said it may build a $2 billion nickel smelter in North Sulawesi Province. PT Inco Tbk has revealed plans to construct a $1.1 billion nickel smelter in Sorowako, South Sulawesi Province, and PT Freeport Indonesia has said it will build a $100 million copper smelter in West Papua Province.

RI to import meat from Brazil

The Jakarta Post, Jakarta | Mon, 01/05/2009 8:43 PM  

Indonesia plans to open the way for Brazilian meat imports in an effort to lower domestic meat prices, Agriculture Minister Anton Aprijantono said Monday in Jakarta. 

"We will expand our sources of supply, which now can be from anywhere, but the most important thing is the meat be safe to consume and halal [fit according to Islamic law]," Apriyantono said, as quoted by Antara news agency. 

He said the additional supply of meat from Brazil would be realized immediately depending on how ready importers were to start importing. 

"We will first inform the importers about the regulation but preparations should continue," he said. 

The minister said that besides increasing the supply, importing more meat would also allow for classification of meat into different grades and price categories. 

"At present, all types of meat are priced the same while they are actually classifiable into better cuts for middle-income consumers, for example, and regular for general consumers," he said. 

President Susilo Bambang Yudhoyono has said the government would cut the price of meat following the drop in the global price of fuel oil. (dre)

Foreign investment up, Jakarta takes most

The Jakarta Post, Jakarta | Thu, 12/11/2008 7:28 AM  

Endowed with rich natural resources and a large population, Indonesia is becoming more attractive for investors as indicated by an increase in the number of realized direct investment projects involving foreign businesspeople. 

Chairman of the Investment Coordinating Board (BKPM) Muhammad Lutfi said Wednesday actual domestic and foreign investment had reached US$14.2 billion in the January to November period, higher than the full-year target of $9.92 billion. 

Of the total, $12.5 billion was foreign direct investment (FDI), and the remaining $1.7 billion was domestic-based. 

“FDI jumped by 40 percent during the period ... But domestic investment plunged by 51 percent,” said Lutfi, who was a member of President Susilo Bambang Yudhoyono’s campaign team during the 2004 election. 

“The drop in domestic investment is due to the fact that local 

companies prefer to form joint ventures with foreign companies in order to pay less tax,” he said, adding that the condition was unlikely to continue as the government would soon implement a new tax law. 

Under the new tax scheme, income tax will be slashed to 28 percent in 2009 and to 25 percent in 2010 from the current 30 percent. 

The actual investment figure excludes those in the sector of oil and gas, mining, banking and financial institutions, including insurers. 

Jakarta received the largest chunk of FDI, reaping $9.62 billion from 404 projects, followed by West Java with $2.39 billion from 255 projects, and Riau with $460.9 million from eight projects. 

In domestic investment, West Java ranked the top with Rp 3.67 trillion (US$334 million) from 52 projects, tailed by East Java with Rp 2.56 trillion from 37 projects, and Banten with Rp 1.95 trillion from 29 projects. 

According to Lutfi, the transportation, storage, telecommunications, metal, machinery, electronics and automotive sectors were the largest contributors to the investment. 

“The good news is that so far some 650,000 people have been employed in the realized investment projects (begun) between January and November.”  “This is a sign that our investment climate is getting better. We hope the trend will continue, especially through intense and serious efforts by local administrations to net more investors,” Lutfi said. 

Last year, FDI reached $10.34 billion; with top sectors including transport, storage, communications and chemicals and pharmaceutical. 

Domestic investment topped Rp 34.8 trillion ($3.16 billion), primarily due to projects involving the paper and printing industry, the food industry and the metal, machinery and electronics industry. (dis) 

 

Inco to hold public consultations on environmental impact studies

Jakarta,  (ANTARA News) - PT. International Nickel Indonesia Tbk (PT Inco) announced here on Tuesday its plan to hold public consultations in Pomalaa (Kolaka District, Southeast Sulawesi) and Bahodopi (Morowali District, Central Sulawesi), as part of the initial stage of its environmental impact studies. 

As reported earlier, the company has started the environmental assessment process at Polamaa and Bahodopi, including the compilation of environmental impact studies, PT Inco said in a press statement. 

As required by the head of the Environmental Impact Management Agency, the public consultation phase must be held to collect ideas, suggestions and views from interested communities to be affected by the company`s development plans. 

PT Inco is reviewing the construction of a high pressure acid leach processing facility at Pomalaa to produce nickel hydroxide, an intermediate nickel product, with an annual production capacity of approximately 30,000 metric tons. 

The company is also studying the option of building a refining facility at Bahodopi with a capacity of approximately 30,000 metric tons per year to process the nickel hydroxide from Pomalaa. 

In Bahodopi, PT Inco also plans to mine a saprolitic nickel orebody. Ore from Bahopopi would be combined with ore from the Sorowako area to feed the existing pyrometallurgical processing facility in Sorowako, the company said. 

PT Inco will present a report on the technical feasibility of the construction of processing facilities at Pomalaa and Bahodopi to the Energy and Mineral Resources Ministry. 

Both projects are expected to be in operation within five years, it said.

TEI falls short of expectations

Mustaqim Adamrah, The Jakarta Post, Jakarta 

The recent 23rd Trade Expo Indonesia (TEI) recorded a total of US$214.17 million in transactions, a slight rise from the $208.26 million recorded at last year's event. 

But despite the increase, the figure was less than projected. 

"The bad news is we missed the target of $220 million because global demand is declining," Trade Minister Mari Elka Pangestu said. 

"But the good news is we were still able to record growth." 

Mari said a slowdown in Indonesia's "traditional markets", such as the United States and members of the European Union, partly contributed to the shortfall. 

For example, the value of transactions with Spanish businesses sharply declined from $23.91 million in 2007 to $2.07 million. 

Orders from Australian businesses also were down dramatically, from $13.71 million to $2.24 million. 

Orders from Japanese businesses fell from $11.26 million last year to $6.49 million, while transactions from Taiwan dropped from $9.88 million to $5.2 million. 

Despite missing the target, the TEI did manage to attract buyers from new markets, Mari said. 

Orders from new players accounted for $148 million of the total, including orders from Egypt ($28.47 million), Bulgaria ($12.25 million), Saudi Arabia ($6.26 million), Sudan ($4.65 million), Nigeria ($4.33 million), Pakistan ($4.32 million), Ukraine ($4.28 million), South Africa ($3.16 million) and Brazil ($3.14 million). 

"We'll now focus on emerging markets, like China and India, as well as on new markets, such as Turkey, Egypt, Iraq, Iran, Uzbekistan, Ukraine, Kazakhtan and Russia," Mari said. 

Indonesia is also trying to benefit from an expected drop in China's share of the international market as it is "losing its competitiveness in the manufacturing sector with the strengthening of the yuan against the U.S. dollar".

Vale Board Approves $14.2 Billion 2009 Spending Plan

By Jeb Blount

Oct. 16 (Bloomberg) -- Cia. Vale do Rio Doce, the world's largest iron-ore producer, plans to spend $14.2 billion in 2009 to expand mining operations worldwide even as the company expects the global economy to slow in the coming quarters.

The 2009 plan, which includes investments in South America, Asia, Africa and the Middle East, is part of a larger effort to increase iron-ore output 69 percent to 500 million metric tons a year by 2015, the company said today in a statement. Vale also plans to expand nickel, coal, copper and alumina operations.

The global credit crisis has stoked investor concern that the world economy may be headed for recession, undermining commodity prices. Still, metals demand will continue to grow in the longer term along with emerging market economies, Vale said. 

"The financial shock and the ensuing credit supply slowdown imposes an additional and important restriction to growing the supply of minerals and metals, favoring large-scale, low-cost producers such as Vale,'' the statement said. 

Vale fell 2.1 percent in Sao Paulo trading before the plan was released. The stock has slumped 29 percent in the last month compared with the 21 percent decline of the Bovespa index that tracks the most-traded stocks on the Sao Paulo exchange. 

Of the total planned spending, $11.7 billion, or 82 percent, will be to complete existing mines and projects, with $3 billion for transport such as railways and ports, it said. Investment in non-ferrous metals such as nickel, copper and aluminum will receive $4.79 billion, and iron-ore is budgeted at $4.2 billion. 

Countries with projects include Brazil, Canada, Indonesia, Chile and Peru, as well as nations in Africa and the Middle East, it said. Vale plans to boost nickel output to 450,000 tons by 2015, 81 percent more than in 2007. 

``The rapid increase of the consumption of minerals and metals are an integral part of the long-term economic development,'' the statement said. 

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomber.net

Indonesia`s Inco set for a 10-for-1 stock split

Jakarta (ANTARA News) - Shareholders of the Indonesian unit of nickel producer Inco Ltd have approved a 10-for-1 stock split to increase liquidity, the company said on Monday.

After the split, the nominal value of PT International Nickel Indonesia's shares would be 25 rupiah each, against 250 rupiah ($0.267), said Indra Ginting, Inco's corporate secretary.

"We will provide further details on the tentative schedule in early January. Share prices will be adjusted one day before the stock split," Ginting was quoted by Reuters as telling a news conference, adding the split still needed to be approved by the Indonesia Stock Exchange.

The firm's shares were trading down 0.84 percent at 94,200 rupiah late morning on Monday, outperforming a 1.6 percent dip in the main index.

PT Inco, wholly owned by Brazil's Companhia Vale do Rio Doce through Canada's Inco Ltd, expects to produce between 165-170 million pounds of nickel in matte this year despite an 11-day strike that caused a production loss of 5 million pounds of nickel in November.

"We may surpass the (2005) record production this year at between 165-170 million pounds," Arif Siregar, Inco's president director said. The firm posted record production of 168 million pounds in 2005.

Inco produced 58,100 tonnes or 128.1 million pounds of nickel in matte in January-September this year, up from 50,400 tonnes, or 111.1 million pounds in the same period 2006.

Last year, it produced 157.9 million pounds, or 71,700 tonnes of nickel in matte.

The company posted a four-fold rise in net profit to $972.55 million in the first nine months of this year from a year ago, amid strong global demand for nickel.

Petrobas joint venture studying bioethanol output in SE Asia

Tokyo (ANTARA News/Asia Pulse) - Brazil-Japan Ethanol Co. has begun exploring the business prospects of manufacturing bioethanol in Indonesia and Cambodia.

The firm is studying the geography and climate in the two countries with the idea of making bioethanol from sugar cane for supply not only to Japan, but also to China and other markets in Asia.

Brazil-Japan Ethanol is a 50-50 joint venture of Brazilian state-run oil company Petroleo Brasileiro SA, or Petrobras, and Japan Alcohol Trading Co. It was set up in March 2006 to serve as the sales agent for bioethanol imported into Japan from Brazil.

RI remains selective in military weapon purchases: minister

Beijing (ANTARA News) - Indonesia maintains a selective and careful attitude in the matter of military weapon purchases amid the many supply offers it has received from other countries because it has to consider any purchase politically, economically, and militarily, Defense Minister Juwono Sudarsono said.

"The purchase of weapons for domestic defense purposes must be carried out selectively, especially from the political and economic viewpoints," Juwono told ANTARA News here on Thursday.

The minister is on a visit to China, among other things, to sign an agreement on defense cooperation with China. The agreement was signed by Juwono and his Chinese counterpart, Cao Gangchuan, in Beijing on Wednesday (Nov. 7).

Basically, Indonesia is trying to produce weapons for its own needs for its land, marine and air defenses, he said.

For this purpose, the defense ministry was always acting in coordination with the industry ministry, he added.

However, to obtain weaponry its domestic industries could not yet make such as jet fighter planes and submarines, Indonesia had to buy them from other countries.

Responding to ANTARA`s question on the possibility of buying armament from China, the minister said there was an interesting offer, especially regarding joint production of weapons.

"That`s what we are exploring now and the cooperation is a concrete step of the Indonesia-China Strategic Partnership signed by President Yudhoyono and President Hu Jintao in April 2005, among other things concerning cooperation in maritime security," Minister Juwono said.

The Indonesian government had also explored and received offers for weapon supply from countries such as Russia, China, Czech Republic and Brazil, according to the minister.

However, he reiterated, the government would be selective in weapon purchases from abroad and consider the pros and cons in the medium and long terms , especially where maintenance of the hardware was concerned.

About the offer from China, he said Indonesia was still comparing the price and technology.

Minister Juwono said China had a significant interest in establishing defense cooperation because 60 percent of its oil tankers had to pass through Indonesian straits when carrying oil and gas imported from the Middle East.

And 38 percent of Chinese goods transported through straits in Southeast Asia.

"Therefore, the cooperation has a meeting point between North East Asia, especially China and Southeast Asia, Indonesia in particular. Both countries can also cooperate in securing marine traffic around and between northeast Asia and Southeast Asia," the minister said.

Vale Reviews Unit's Plans to Build Nickel Smelters in Indonesia

By Bambang Dwi Djanuarto and Leony Aurora

Nov. 2 (Bloomberg) -- Cia. Vale do Rio Doce, the world's second-largest nickel producer, is reviewing plans by its Indonesian unit to build smelters at two projects pending an assessment of the amount of mineral reserves.

Vale, based in Rio de Janeiro, is examining whether output from PT International Nickel Indonesia's projects in Bahudopi in Central Sulawesi and Pomalaa in Southeast Sulawesi will support smelters, Roberto Castello Branco, Vale's director of investor relations, told reporters in Jakarta late yesterday.

PT Inco, as International Nickel is known, said in March that it may build a $500 million mine and processing plant in Bahudopi by 2010 and is looking at a possible plant in Pomalaa. Nickel prices have fallen 37 percent in London from the record $51,600 a metric ton of May 4, 2007.

``It depends on the economic scale'' of the projects, Branco said. ``It takes time to do'' the analysis and feasibility studies to determine whether the projects are economically viable, he said.

Vale took control of PT Inco in October last year in its C$15 billion takeover of Canada's Inco Ltd. PT Inco, Indonesia's largest metal producer by market value, more than doubled profit in the third-quarter of the year to $265.5 million, the company said on Oct. 26. Production climbed 11 percent to 19,100 tons in the three months.

To contact the reporter on this story: Leony Aurora in Jakarta at laurora@bloomberg.net

Inco says to boost 2008 nickel output by 11.5 pct

Thu Nov 1, 2007 7:25am EDT

JAKARTA, Nov 1 (Reuters) - Nickel producer Inco, owned by Brazil's Campanhia Vale do Rio Doce (VALE5.SA: Quote, Profile, Research)(RIO.N: Quote, Profile, Research), expects to lift nickel output by 11.5 percent to 290,000 tonnes next year, a CVRD director said on Thursday.

Roberto Castello Branco, CVRD's investor relations director, told reporters the firm was increasing capacity globally, which should lift nickel output from 260,000 tonnes this year.

"We expect it'll contribute an increase in revenue," he said on the sidelines of a mining conference in the Indonesian capital, without elaborating.

CVRD's overall capital spending budget for 2007 is $7.4 billion, about $5.4 billion of which is to be spent on projects and research and development.

The Indonesian unit of Inco (INCO.JK: Quote, Profile, Research) is also in the process of expanding its nickel production by building a hydroelectric power plant in Indonesia's Sulawesi island.

The plant is expected to be completed by 2010 and will allow the Indonesian's unit to boost production of nickel in matte to 200 million pounds per year.

The firm aims to produce between 160-165 million pounds of nickel in matte this year.

Aside from Indonesia, the company is also working on its Goro nickel project in New Caledonia with estimated spending at $3.2 billion, $1.4 billion of which was spent between 2001 and 2006. $938 million is allocated this year.

Nickel trading on the London Metal Exchange was flat on Thursday at $32,000/32,500.

Indonesia forestry ministry grants permit for Inco power project

Jakarta (ANTARA News) - Nickel miner PT International Nickel Indonesia (INCO) said Monday the Forestry Ministry has given it permission to use a forested area adjacent to its concession area for the construction of the Karebbe hydroelectric generating facility in South Sulawesi.

Construction of the facility was suspended in January 2006 pending issuance of the permit.

"We are very pleased to have received this permit that is central to moving forward on the project," Inco president and CEO Arif Siregar was quoted by Thomson Financial as saying.

He said Inco's board of commissioners will meet shortly to decide when to resume construction of the project.

Once completed, the facility will increase Inco's hydroelectric power-generating capacity by 90 megawatts or 33 percent.

Inco is majority-owned by CVRD Inco Ltd of Canada. CVRD Inco is wholly owned by Companhia Vale do Rio Doce of Brazil.

PT Inco expects to start construction of Karebbe Dam next month

Jakarta (ANTARA News) - Nickel miner PT International Nickel Indonesia (Inco) expects to start the construction of a new dam, called the Karebbe dam, on the Larona river in the Indonesian province of South Sulawesi, which will increase its hydroelectric power-generating capacity by 90 megawatts or 33 pct, company president Arif Siregar said.

"We're now waiting for the final clearance letter from the Forestry Ministry, which we expect to receive soon. If everything goes as planned, we could begin constructing the dam next month and it should be completed in 2009," Siregar was quoted by Thomson Financial as telling reporters.

His company estimates that the cost of building the dam is 280 million US dollars.

Siregar said he expected that, once the dam was completed, his company's output would increase to 200 million pounds of nickel in matte in 2010 from the 60-165 million pounds forecast for this year.

Indonesia and Vietnam to join forces to market pepper

Jakarta (ANTARA News) - Indonesia and Vietnam, two of the world's main producers of pepper, are to cooperate in marketing it, an executive of the Indonesian pepper industry said Wednesday.

Mustakim Wijaya, vice-chairman of the Indonesian Pepper Exporters' Association, said producers here and in Vietnam planned to establish a joint committee to focus on marketing, improving quality standards and compiling statistics.

"The Vietnamese side wants the joint committee to be formed before the end of the year, and we are working on this," he was quoted by Thomson Financial as saying.

Together, the two countries produce more than 45 percent of the world's pepper.

Wijaya said the committee would meet annually to discuss the international market.

China and Brazil, two other big producers, have expressed interest in joining the committee and have sent observers to meetings between Indonesian and Vietnamese representatives, including a two-day meeting which finished here Tuesday.

Vietnam has about 33 percent of the world market, Brazil has 15 percent and Indonesia 13 percent.

Mustakim said that world pepper supply remained well below demand, with a shortfall of about 47,500 tonnes estimated for 2007.