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Gold/Mining/Energy : Donner Minerals (DML.V) -- Ignore unavailable to you. Want to Upgrade?

To: wayne cath who wrote (4179)	4/22/1998 10:39:00 AM
From: VAUGHN	Read Replies (1) \| Respond to of 11676

Hello All Since there has been so much discussion about the economics of nickel I thought this NR would be of interest. INCO FOCUSES ON STRATEGY TO BE THE MOST PROFITABLE AND LOWEST-COST NICKEL PRODUCER TORONTO, April 22 /CNW/ - Inco Limited must change the way it does business today in the face of a very competitive environment and low prices if it wants to become the most profitable and lowest cost producer in the world, says Inco Chairman and Chief Executive Officer Michael D. Sopko. Speaking to shareholders at the Company's Annual General Meeting today, Mr. Sopko added that the 97-year-old company is taking the tough steps needed to restructure its global business and will develop new, low-cost production capacity to maintain leadership in nickel well into the 21st century. The Voisey's Bay nickel deposit in Labrador remains high on Inco's priority list of development projects. But it is not without challenges in the areas of the environment, land claims with aboriginal groups and negotiations with the Government of Newfoundland and Labrador. Any of these issues could delay the project, he said. Still, the Company believes it is feasible to produce its first nickel concentrate from Voisey's Bay late in the year 2000. ''We wish to proceed with full development of Voisey's Bay, but only if it makes economic sense to our shareholders,'' he said. ''This commitment was always subject to the technical and economic realities of the project. It was never unconditional.'' While the Newfoundland government wants a full refinery and smelter on the island, Mr. Sopko said Inco has excess smelting and refining capacity at its Sudbury and Thompson operations and the price of nickel is much lower today than when the Company acquired the Voisey's Bay deposit. ''What obviously makes sense is a solution that allows us to build processing facilities in Newfoundland and permits your company to receive an acceptable return,'' he told shareholders. Inco President Scott Hand said Inco's goal in its Canadian operations, which are undergoing a major restructuring, is maximizing cash flow and profitability by focusing on profitable mine production, not volume. He said restructuring has called for hard decisions but said the Company has ''no choice if we are to ensure the ongoing competitiveness of operations.'' Noting that more than half the 1,000 people leaving the payroll in the Ontario Division are retirements, he said Inco is doing as much as it possibly can to ease the transition. He described Inco as ''asset-rich'' with outstanding development projects at existing mines in Canada and Indonesia, at Voisey's Bay and at Goro on the south Pacific Island of New Caledonia. Projects with the greatest returns to shareholders will be developed first. While pointing to depressed nickel prices for Inco's recent weak financial results, Mr. Sopko said the Company is making progress with first quarter nickel production costs dropping by 8 per cent over the same period last year. Nickel demand in 1998, he said, continues to be good and outside of Japan, the Asian market is still strong. In 1997, high levels of Russian nickel exports and increased use of stainless-steel scrap saw nickel supply outpace demand by about 1.6 per cent. Mr. Sopko said Inco has the game plan, assets and skilled people to make Inco a profitable company in virtually any nickel price environment and the low-cost leader well into the next century. Regards