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April 11, 2005
 
Inco sells stake in Goro Nickel to Sumitomo Metal and Mitsui for US$150M
Inco announces completion of acquisition by Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd. of a 21% interest in Goro Nickel S.A.
 
by Andrew McKay
HNN Foreign Correspondent
 
Toronto, Ontario (HNN) - Inco Limited announced today that Sumitomo Metal Mining Co., Ltd. and Mitsui & Co., Ltd., through a jointly owned company they have formed ("Sumic Nickel Netherlands"), have acquired a 21% ownership interest in Goro Nickel S.A. ("Goro Nickel"). Goro Nickel is the project company for Inco's Goro nickel-cobalt project in the French Overseas Territorial Community of New Caledonia. Inco had, as previously announced, been negotiating with Sumitomo Metal Mining and Mitsui on reaching final agreement on the terms of this transaction.
 
Under the terms of the agreements entered into by the parties covering this transaction, Sumitomo Metal Mining and Mitsui have paid in total approximately U.S. $150 million for the 21% interest. This amount includes their pro rata share of project capital and other expenditures made since Inco announced its initial decision in July 2001 to proceed with this project and certain advances made by Inco to fund the project. This amount is subject to certain adjustments tied to the actual capital cost of the project.
 
"We are very excited to have Sumitomo Metal Mining and Mitsui join Inco and the three provinces of New Caledonia as a shareholder in our Goro project", said Scott Hand, Inco's Chairman and CEO.
 
Sumic Nickel Netherlands has the right and obligation to purchase its pro rata share of the nickel and cobalt products to be produced from the planned Goro project, with Inco purchasing the balance of such products. Sumic Nickel Netherlands is also required to provide its pro rata share of the funding required to complete the project, subject to certain limitations and adjustments tied to the actual capital cost of the project and the project satisfying certain threshold production tests. In addition, Sumic Nickel Netherlands has the right to participate in future expansions of the Goro project and also has certain rights to approve certain expenditures and other actions relating to Goro Nickel or the Goro project that would be outside the currently planned scope and operation of the project.
 
As a result of this transaction, Inco now holds a 69% ownership interest in Goro Nickel, Sumic Nickel Netherlands has a 21% ownership interest and New Caledonia, through the company formed by the three provinces of New Caledonia which became a shareholder in Goro Nickel on February 18, 2005, has a 10% ownership interest.
 
"This acquisition represents another milestone in the relationship Sumitomo Metal Mining has had with Inco", said Mr. Koichi Fukushima, President of Sumitomo Metal Mining Co., Ltd. "Sumitomo Metal Mining and Mitsui look forward to working with Inco and the three provinces of New Caledonia on making Goro a very successful project."
 
This news release contains forward-looking statements regarding the Company and the financing and advancement of its Goro nickel-cobalt project. Actual results and developments may differ materially from those contemplated by these statements depending on, among others, such key factors as business and economic conditions in the principal markets for the Company's products, the supply and demand for nickel and other metals, the capital cost, scope, schedule, ramp-up, engineering and construction timetables and other key aspects of the Goro project, and the timely receipt of the shareholder funding of, and all necessary permits and regulatory approvals for, the project.
 
Following the announcement, Inco shares (TSX:N) closed down 41 cents at $48.72 Cdn on the Toronto Stock Exchange.
 
The Special Metals Corporation group of companies was created in the latter part of 1998 when Special Metals Corporation of New Hartford, New York, acquired Inco Alloys International, including its Huntington Alloys and Wiggin Alloys divisions. How this will affect the operations of Special Metals in Huntington, WV, is yet to be realised. However, with increasing emphasis on "third world" – to use an increasingly obsolete term – mining and manufacturing facilities, from this writer's perspective it will be anything but good.

Andrew McKay B.A., Ph.D. (Cambridge), has been at the University of Nottingham since 1992. His research interests are in development economics, with particular interests in poverty and income distribution; trade policy in developing countries; agriculture; statistical issues; and labour markets. His work is predominantly applied, with a mainly microeconomic focus; much of it involves analysis of household level data. He has received research funding from various sources, including DFID, the World Bank, and the Ford Foundation, and has undertaken advisory work for a range of development agencies including DFID, the World Bank, the European Commission, and the OECD Development Centre. He has published a large number of articles, many of these in refereed journals. These include articles in many of the main development journals, such as The Journal of Development Economics, World Development, The Journal of International Trade and Economic Development, The Journal of Development Studies and The Journal of African Economies. He teaches a range of third year and taught postgraduate modules on development-related topics, and acts as Course Director of the Masters Programmes in the School of Economics.