Indonesia's International Nickel to borrow $300m to finance hydro-power project

Bank of Tokyo-Mitsubishi and Mizuho Corporate Bank are the lenders

JAKARTA (Reuters) - 

PT International Nickel Indonesia (INCO.JK: Quote) said on Tuesday it would borrow up to $300 million from Bank of Tokyo-Mitsubishi UFJ (8306.T: Quote) and Mizuho Corporate Bank (8411.T: Quote) to finance a hydro power project on Sulawesi island.

Inco is building a hydro power plant project in Karebbe, South Sulawesi, near its mines in Sorowako. The Karebbe project will increase its power generation by a third, or 90 megawatts a year, and will improve efficiency.

"The project is part of the efforts to produce permanent downward shifts in our cost structure, as it will replace high-cost thermal power generation in an energy-intensive operation," Inco said in an emailed statement.

Brazil's Vale Inco Ltd (VALE5.SA: Quote), one of the world's top nickel producers, has a 60.8 percent stake in Inco and would be the guarantor of the loan.

Inco said previously that it expected nickel output to drop 20 percent in 2009 to about 59,000-60,000 tonnes.

Nickel prices MNI3 at the London Metal Exchange traded at $16,300 a tonne at 1044 GMT on Tuesday, up 39.32 percent so far this year but still far below the record high of $51,800 a tonne hit in May 2007. (Reporting by Tyagita Silka; Editing by Sara Webb) ((tyagita.silka@thomsonreuters.com; Reuters Messaging: tyagita.silka.thomsonreuters.com@reuters.net; +62 21 384 6364 ext 905)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

© Thomson Reuters 2009 All rights reserved

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