Indonesia's Inco: road blockade not hitting output

JAKARTA, Aug 10 (Reuters) - Production at a Sulawesi mine operated by PT International Nickel Indonesia (INCO.JK) has not been affected by a new road blockade to protest against the firm's plans to cut jobs there, INCO said on Monday.

The blockade was launched by hundreds of villagers along the road to INCO's mine on the Indonesian island.

Last month, Inco said it planned to cut 87 jobs, or nearly 3 percent of its workforce, to reduce costs in response to the global financial crisis, which has reduced demand for stainless steel and thus nickel, a key raw material input.

Tri Rachman Batara, a spokesman for INCO, said it would continue negotiations with the protesters on Monday afternoon.

"There has been a road blockade again since this morning," Batara said, adding that the protest near the company's housing complex had not affected mine operations because it was outside the mine area.

Brazil's Vale Inco Ltd. (VALE5.SA) has a 60.8 percent stake in Inco.

Inco has around 3,400 employees, most of whom work at its mining site in Sorowako, South Sulawesi. It said the job cuts, which will affect workers near retirement age and some foreigners, would not affect this year's production.

Villagers around Inco's mine were concerned about further job cuts by the firm, which employs many locals, Andi Duding, the head of the Sorowako Indigenous Group (KWAS), said last week.

In May, Inco revised down its capital expenditure plans this year to $166.4 million, from $228.8 million initially planned in February, reflecting a slump in global demand for nickel. (Reporting by Telly Nathalia; Editing by Ed Davies and Clarence Fernandez)