JAKARTA, May 26 (Reuters) - PT International Nickel Indonesia (INCO.JK) has revised down its capital expenditure budget for this year by more than a quarter to adjust projects to reflect a slump in global demand, the company said on Tuesday. Inco -- in which Brazil's Vale Inco Ltd (VALE5.SA), one of the world's top nickel producers, has a 61.2 percent stake -- said it has revised down its spending for this year to $166.4 million from $228.8 million initially planned in February.
"This review reflects a change in the priority and scope of existing projects," the firm said in a statement.
Inco's net profit fell 87.7 percent to $17.2 million in the first quarter of this year due to significantly lower prices.
Nickel prices MNI3 have slumped around 76 percent to about $12,575 a tonne since hitting a record high of $51,800 a tonne in May 2007 on falling demand from stainless steel producers as global economic weakness slowed construction and manufacturing activity.
The firm has asked the government for more time to asses plans for a new plant after a study showed that the $1.8 billion project on Sulawesi island may not be feasible. [ID:nJAK442283]
But it is still on track to complete construction of the Karebbe dam near its current mines in Sorowako, South Sulawesi by the first quarter of 2011, the firm has said.
The Karebbe dam is expected to provide an additional 90 megawatts of power per year, from 275 megawatts currently, and will help boost production.
In 2008, Inco produced 72,400 metric tonnes of nickel-in-matte.
Inco produced 16,200 metric tonnes of nickel-in-matte in January-March this year, down from 20,100 metric tonnes a year ago. It had said it might cut output by 20 percent this year from last year if prices remained weak.
Shares in PT Inco fell 2.86 percent on Tuesday against a 1.77 percent loss in the broader market .JKSE.
(Reporting by Fitri Wulandari; Editing by Ed Davies)
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