Karebbe was suspended early 2006 pending the outcome of the assessment for the forestry permit. The Ministry of Forestry issued the permit to PT Inco in late August.
The project will involve construction of a 80m high RCC dam, conventional spillway, intake, and a power house under the spillway chute. Design was done by SNC Lavalin and va-tech Hydro is supplying turbines and generators.
PT Inco said the power from Karebbe would enable it to reach 200M pounds of nickel production annually in matte form, an intermediate product, at its plant near Sorowako on the island on Sulawesi.
The company is majority owned by Canadian firm CVRD Inco Limited, which in turn is wholly-owned by Brazilian group Companhia Vale do Rio Doce.
Last month, compatriot ferronickel producer PT Antam signed a power supply deal for peak load capacity to by met by hydro power schemes being developed by local firm PT Tamboli Energy.