Indonesia's Inco plays down strike impact on output

JAKARTA, Nov 20 (Reuters) - The Indonesian unit of nickel producer Inco Ltd said on Tuesday it was still on track to produce 160-165 million pounds of nickel this year despite a strike by workers.

Around 200 workers at the firm's Sorowako site on Sulawesi island were still on strike after starting their action last Thursday, demanding a higher bonus and salary, said Arief Siregar, the chief executive of PT International Nickel Indonesia (INCO.JK).

"The strike has an impact in that some work has been delayed because of it, but we still can meet our annual target. We will continue to negotiate with them," Siregar added.

Last Thursday, an Inco spokesman said around 500 employees out of the company's total work force of 5,000 had launched strike action.

PT Inco, wholly owned by Brazil's Companhia Vale do Rio Doce (VALE5.SA) RIO.N through Canada's Inco Ltd, produced last year 157.9 million pounds, or 71,700 tonnes in matte, which is used in stainless steel production.

The company's nine month net profit was up four fold to $972.55 millions compared to $247.91 millions in the same period last year.

The company expects to complete a hydroelectric dam on the island in 2010 to boost production of nickel in matte to about 200 million pounds a year.

On Monday, the prices of nickel MNI3 on the London Metal Exchange tumbled to $30,200 a tonne, down $1,050 from Friday.

(Reporting by Mita Valina Liem, editing by Ed Davies) (fitri.wulandari@reuters.com; Tel +6221 384 6364 Reuters Messaging: fitri.wulandari.reuters.com@reuters.net;)