Behind Our Energy Conservation Strategy

Despite a weakening global economy and a sharp decline in nickel prices, the Company remained profitable in 2008, with annual sales being the third highest in the Company’s history. Nickel in matte production reached 72,385 metric tons in 2008, below our target of 77,000-to-79,000 metric tons but nevertheless also representing the third highest annual production in our history.

PT Inco’s large-scale investments in energy and energy conservation are setting the stage for higher corporate profitability and the delivery of social and economic benefits to the people of Indonesia. Our primary capital project is to build a third hydroelectric generating facility at Karebbe on the Larona River. Among the other highlights of our energy conservation strategy are projects to: convert process plant dryers from high sulphur fuel oil to pulverized coal; rebuild our steam turbine (completed in 2008); and upgrade Larona generators.

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