Aneka Tambang, an Indonesian mining firm, is seeking to initially procure one million mt of nickel per year from PT International Nickel Indonesia (INCO) under a supply contract.

"We are in discussion, right now we are sorting out the technical and commercial issue. In principle there's no problem with Inco," President Director Alwin Syah Loebis said. "We want to increase that, ideally to a level in line with our demand of 1.8-2.0 million mt a year."

He also said the company, which has a market capitalisation of $2.2 billion, is expecting better revenue for 2010 due to higher nickel sales and better metal prices, but declined to say how much its revenue would increase.

Under a potential agreement the nickel from INCO, a unit of Brazil's Vale, will be used for Antam's third smelter called FeNi3 in Pomalaa.

Loebis said the state-owned firm is expecting an average ferronickel prices of $8/lb from around $6.6 last year and reiterated the plan to boost its ferronickel output by nearly 50% to 19,000 mt in 2010.