Canadian mining group Inco Limited yesterday opened a nickel foam joint venture in this port city with partners from South Korea and China.

Inco, Korea Nickel Corporation and Liaoning Wanzhong Real Property Development of Dalian have invested a total of US$25 million in the joint venture, said Peter Goudie, Inco's executive vice-president.

As the world's No 2 nickel producer, the Canadian group has a controlling stake of 77 per cent in the venture, Korea Nickel 20 per cent and the Chinese partner 3 per cent, Goudie said.

Including this joint venture, Inco's total investment in China has risen to US$80 million.

The nickel foam will mainly be used in hybrid-powered automobiles, which run on a combination of gasoline and nickel-foam-based rechargeable batteries.

The Dalian venture will produce 2 million square metres of nickel foam a year, about half of Inco's annual global output of the product.

"This plant puts Inco in an ideal position to supply China's expanding battery industry, as well as battery customers in Japan and other Asian countries," Goudie said at the project's opening ceremony.

A lot of global auto giants and domestic car-makers, such as General Motors, Toyota, Geely and Chery, are preparing to produce hybrid-powered cars in China.

"The world is hungry for nickel, and China is the driving force behind that demand. We believe that a big part of nickel's future will be happening right here in China - and we plan to be part of it," Goudie said.

Inco also plans to build a new facility in China to further process nickel produced by its project at Goro, in New Caledonia, to supply China's growing stainless steel sector, he said.

Inco, which started business in China in 1994, already has three nickel plants in Dalian, Shenyang in Liaoning Province, and Kunshan in Jiangsu Province.

The company said its sales in China could exceed US$400 million this year. Last year, Inco's global sales amounted to US$4.2 billion.

The opening ceremony of the venture in Dalian was attended by Canada's Minister of International Trade, Jim Peterson, who today is to participate in a two-day informal ministerial meeting of the World Trade Organization in the city.