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EXHIBIT 99
 PROXY CIRCULAR AND STATEMENT
DATED FEBRUARY 17, 2006




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Notice of AnnualMeeting ofShareholdersApril 20, 2006  (INCO LOGO)  Proxy Circularand StatementINCO LIMITEDTo be held at 10:00 a.m.Thursday, April 20, 2006Design ExchangeTrading Floor234 Bay StreetToronto-Dominion CentreToronto, Ontario, Canada




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Yours sincerely,(-s- Scott M. Hand)
     Scott M. HandChairman and Chief Executive Officer




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##### 



TABLE OF CONTENTS
 NOTICE OF MEETING
    
    
    1PROXY CIRCULAR AND STATEMENT
    
    
    3PART I  VOTING
    INSTRUCTIONS
    
    
    3PART II  BUSINESS OF THE
    MEETING
    
    
    61. Financial Statements
    
    
    62. Election of Directors
    
    
    63. Appointment of the Auditors
    
    
    114. Other Business
    
    
    12PART III  CORPORATE
    GOVERNANCE
    
    
    13Statement of Corporate Governance
    Practices
    
    
    13Audit Committee Report
    
    
    22PART IV  DIRECTOR AND
    EXECUTIVE COMPENSATION
    
    
    24Director Compensation
    
    
    24Executive Compensation
    
    
    26Report on Executive Compensation
    
    
    34Comparative Shareholder Return
    
    
    38PART V  OWNERSHIP OF
    SECURITIES
    
    
    39Significant Security Holders
    
    
    39Security Holdings of Directors and
    Executive Officers
    
    
    39PART VI  OTHER
    INFORMATION
    
    
    41Solicitation of Proxies
    
    
    41Shareholder Proposals For 2007 Annual
    Meeting
    
    
    41Additional Information About the Company
    
    
    41Directors Approval
    
    
    41




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NOTICE OF MEETING
   (1)
    receiving the Companys financial statements for the year
    ended December 31, 2005 and the Auditors report
    thereon;(2)
    electing the Companys Directors for a one-year term
    expiring in 2007;(3)
    appointing the Auditors of the Company; and(4)
    transacting such other business as may properly be brought
    before the Meeting.    
  Executive Vice-President, General Counsel &
Secretary
  1




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2




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PROXY CIRCULAR AND STATEMENT
 This Proxy Circular and Statement explains in detail the
items of business that will be considered at the Annual Meeting
of Shareholders of Inco Limited (the Meeting) to be
held on Thursday, April 20, 2006 beginning at
10:00 a.m. (local time) at the Design Exchange, Trading
Floor, 234 Bay Street, Toronto-Dominion Centre, Toronto,
Ontario, Canada.
 All dollar amounts in this Proxy Circular and Statement are
stated in U.S. dollars unless otherwise indicated.
Information contained in or otherwise accessed through the
Companys website, or any other website referred to in this
Proxy Circular and Statement, does not form part of this Proxy
Circular and Statement and any website addresses contained
herein are inactive textual references only. The Company has its
executive offices at 145 King Street West, Suite 1500,
Toronto, Ontario, Canada M5H 4B7.
 
 PART I  VOTING INSTRUCTIONS
 Who Can Vote
  How to Vote Your Common Shares
 For Registered Shareholders
   By Mail.
 By Telephone.
 By Internet. www.eproxyvoting.com/incovote
  3




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Your proxy must be received by the Company no later than
24 hours prior to the start of the Meeting (that is, by
10:00 a.m. Toronto time on April 19, 2006) or any
adjournment of the Meeting. If you vote by mail, you must ensure
that your proxy is received in advance of that time. Telephone
and Internet voting will not be available after 10:00 a.m.
Toronto time on April 19, 2006.
 For Non-registered Shareholders
 you should carefully follow the
instructions on the request for voting instructions or form of
proxy that you receive from the intermediary, in order to vote
the Common Shares that you hold with that intermediary.
  Voting Instructions
  If you appoint the
proxy holders named on the attached form of proxy, who are
Directors of the Company, and do not specify how they should
vote your shares, then your shares will be voted as follows:
  (1) FOR the election of the Directors; and(2) FOR the appointment of the Auditors.    4




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If You Change Your Mind
   (a)
    completing and signing a form of proxy at a later date than the
    form of proxy which you previously returned and depositing it
    with CIBC Mellon Trust Company; or  (b)
    depositing a written statement signed by you or your attorney as
    authorized by you in writing (i) with the Office of the
    Secretary, at the head office of the Company, at any time up to
    and including April 19, 2006 or, if the Meeting is
    adjourned, the business day before the day to which the Meeting
    has been adjourned, or (ii) with the Chairman of the
    Meeting on the day of the Meeting before the start of the
    Meeting or, in the case of any adjournment of the Meeting,
    before the start of the Meeting as so adjourned.   Votes Required for Approval
  Counting the Votes
   5




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PART II  BUSINESS OF THE MEETING
 
  1.
    FINANCIAL STATEMENTS  
  2.
    ELECTION OF DIRECTORS   Nominees for Election
  
  
 Glen A. BartonPeoria, Illinois, USA
    
    Common Shares: 21,323Director since 1994
    
    Deferred Share Units:   6,484
    *Options: 10,000
   6




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Angus A. Bruneau, O.C.St. Johns, Newfoundland, Canada
    
    Common Shares:
  5,745Director
since 1998
    
    Deferred Share Units:
11,866
    *Options:   NoneWarrants:
  1,125
   
  
 Ronald C. CambreDenver, Colorado, USA
    
    Common Shares:
  NoneDirector
since 2002
    
    Deferred Share Units:
11,611
    *Options: 10,000
   
  
 Scott M. HandToronto, Ontario, Canada
    
    Common Shares:
222,579Director
since 1991
    
    Options:
308,000


7



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Janice K. HenryRaleigh, North Carolina, USA
    
    Common Shares:
 NoneDirector
since 2004
    
    Deferred Share Units:
 6,131
    *Options:  None
   
  
 Chaviva
M. HoekToronto, Ontario, Canada
    
    Common Shares:
  NoneDirector
since 2002
    
    Deferred Share Units:
10,455
    *Options: 10,000
   
  
 Peter C. JonesOakville, Ontario, Canada
    
    Common Shares:
  61,354Director
since 2003
    
    Options:
172,800


8



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John T. MayberryBurlington, Ontario, Canada
    
    Common Shares:
  3,000Director
since 2003
    
    Deferred Share Units:
  8,072
    *Options:   None
   
  
 Francis MerParis, France
    
    Common Shares:
     778Director
since 2005
    
    Deferred Share Units:
  1,130
    *Options:
  None
   
  
 David P. OBrienCalgary, Alberta, Canada
    
    Common Shares:
  7,942Director
since 1996
    
    Deferred Share Units:
10,449
    *Options: 10,000Warrants:
     225


9



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Roger Phillips, O.C., S.O.M.Regina, Saskatchewan, Canada
    
    Common Shares:
7,000Director
since 2003
    
    Deferred Share Units:
8,396
    *Options: 5,000
   
  
 Richard E. WaughToronto, Ontario, Canada
    
    Common Shares:
NoneDirector
since 2005
    
    Deferred Share Units:
 2,185Options: None




New Board Policy on the Election of Directors




Agreement to Appoint Additional Directors




10



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2 3
  Other Corporations Where Director Nominees are Members of the
Same Board
  Corporation
    
    Director NomineeThe Bank of Nova Scotia
    
    Richard E. WaughJohn T. MayberryCleveland Cliffs Inc.
    
    Roger PhillipsRonald C. Cambre 
  3.
    APPOINTMENT OF THE AUDITORS     11




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Auditors Fees
  Fees Billed During the Year
    
    Fees Billed During the YearServices
    
    Ended December 31, 2005
    
    Ended December 31, 2004Audit services
    
    $
    3,895,000
    
    
    $
    4,328,000Audit-related services
    
    
    394,000
    
    
    
    259,000Tax services
    
    
    479,000
    
    
    
    729,000All other services
    
    
    99,000
    
    
    
    52,000Total
    
    $
    4,867,000
    
    
    $
    5,368,000   
  4.
    OTHER BUSINESS  12




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PART III  CORPORATE GOVERNANCE
 
 STATEMENT OF CORPORATE GOVERNANCE PRACTICES
  58-101  Disclosure
of Corporate Governance Practices Corporate Governance Guidelines
 Incos System of Corporate Governance Practices
 www.inco.com
 Director Independence
   13




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Chairman of the Board and Executive Officer Positions and
Responsibilities and Lead Director Position
    14




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Mandate of the Board of Directors of the Company
 day-to Canada Business Corporations Act
  Decisions Requiring Board Approval
 Canada Business
Corporations Act
 15




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Boards Expectations of Management
 day-to
 Board Size
  Director Recruitment
  Director Orientation and Continuing Education
   16




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Retirement Age and Term Limits
    Assessment of Board Performance
  Shareholder/ Investor Communications and Feedback
 www.inco.com
 Ethical Business Conduct
  17




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Director Attendance Record
  18




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Corporate
    
    
    
    ManagementCapital
    
    Governance &
    
    Environment,
    
    Resources &Board of
    
    Audit
    
    Projects
    
    Nominating
    
    Health & Safety
    
    Compensation
    
    PensionDirectors
    
    Committee
    
    Committee
    
    Committee
    
    Committee
    
    Committee
    
    CommitteeDirectors Name
    
    (23 Meetings)(1)
    
    (7 Meetings)
    
    (2 Meetings)
    
    (3 Meetings)
    
    (4 Meetings)
    
    (2 Meetings)
    
    (3 Meetings)Glen A. Barton
    
    
    22/23
    
    
    
    7/7
    
    
    
    
    
    
    
    3/3
    
    
    
    
    
    
    
    
    
    
    
    Angus A. Bruneau
    
    
    16/23
    
    
    
    
    
    
    
    
    
    
    
    2/3
    
    
    
    3/4
    
    
    
    
    
    
    
    3/3Ronald C. Cambre
    
    
    22/23
    
    
    
    7/7
    
    
    
    2/2
    
    
    
    
    
    
    
    
    
    
    
    2/2
    
    
    
    Scott M. Hand(2)
    
    
    23/23
    
    
    
    
    
    
    
    
    
    
    
    3/3
    
    
    
    
    
    
    
    
    
    
    
    Janice K. Henry
    
    
    21/23
    
    
    
    7/7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3/3Chaviva M. Hoek
    
    
    22/23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4/4
    
    
    
    
    
    
    
    3/3Peter C. Jones(2)
    
    
    22/22
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John T. Mayberry
    
    
    23/23
    
    
    
    
    
    
    
    2/2
    
    
    
    3/3
    
    
    
    4/4
    
    
    
    
    
    
    
    Francis Mer(3)
    
    
    8/11
    
    
    
    1/2
    
    
    
    1/1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    David P. OBrien
    
    
    21/23
    
    
    
    
    
    
    
    
    
    
    
    3/3
    
    
    
    
    
    
    
    2/2
    
    
    
    Roger Phillips
    
    
    21/23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4/4
    
    
    
    2/2
    
    
    
    James Stanford(4)
    
    
    11/12
    
    
    
    4/4
    
    
    
    1/1
    
    
    
    
    
    
    
    
    
    
    
    1/1
    
    
    
    Richard E. Waugh(3)
    
    
    10/11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1/1
    
    
    
    1/1 
  (1)
    Includes both regularly scheduled meetings (12) and
    non-regularly scheduled (11) meetings.(2)
    As a Director who is also an employee of the Company,
    Mr. Jones was not invited to one of the meetings of the
    Board of Directors held in 2005.(3)
    Mr. Mer and Mr. Waugh joined the Board of Directors on
    July 18, 2005.(4)
    Mr. Stanford retired from the Board of Directors on
    July 19, 2005.  Board Committees
 www.inco.com
 Audit Committee
  19




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Corporate Governance and Nominating Committee
   20




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Management Resources and Compensation Committee
  Pension Committee
  Environment, Health and Safety Committee
  Capital Projects Committee
  21




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Shareholder Communications to the Board
   By mail:
    Inco Limited 
     Office of the Secretary 
     145 King Street West 
     Suite 1500 
     Toronto, ON M5H 4B7By email:
    askboard@inco.com  
 AUDIT COMMITTEE REPORT
    22




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Canada Business Corporations Act 10-K
       23




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PART IV  DIRECTOR AND EXECUTIVE
COMPENSATION
 
 DIRECTOR COMPENSATION
 Directors Compensation in 2005
   Retainer, Fee or Option Grant
    
    AmountAnnual Director Retainer
    
     $45,000 in cash*
    and 1,100 Common Shares or Deferred Share UnitsAnnual Award of Deferred Share Units
    
     1,500 Deferred Share UnitsExtra Committee Retainer (for service on more than two
    Committees, excluding the Capital Projects Committee)
    
     200 Common Shares or Deferred Share UnitsCommittee Chair Retainer (other than Audit Committee)
    
     $2,000 in cash*
    and 200 Common Shares or Deferred Share UnitsAudit Committee Chair Retainer
    
     $2,000 in cash*
    and 500 Common Shares or Deferred Share UnitsAudit Committee Member Retainer
    
     200 Common Shares or Deferred Share UnitsCapital Project Committee Meeting Fees
    
     $3,000 in cash* per meetingLead Director Retainer
    
     $30,000 in Common Shares or Deferred Share Units  *
    Non-employee Directors may elect to receive all or part of their
    nominal cash compensation in the form of Common Shares or
    Deferred Share Units, as described above. Annual Awards of Common Shares or Deferred Share Units.
 Additional Equity Compensation and Minimum Equity Ownership
Requirements.
 24




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Annual Award of Deferred Share Units.
 Aggregate Value of Compensation Package.
 Directors Compensation in 2006
  25




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EXECUTIVE COMPENSATION
 Compensation of Named Executive Officers
  
  
 LONG TERMCOMPENSATIONAWARDSSecuritiesANNUAL COMPENSATION
    
    Restricted
    
    Underlying
    
    All OtherName and
    
    
    
    Share
    
    Options/SARs
    
    CompensationPrincipal Position
    
    Year
    
    Salary($)
    
    Bonus($)(2)
    
    Other($)(3)
    
    Awards($)(4)
    
    Granted(#)(5)
    
    ($)(6)Scott M. Hand
    
    2005
    
    
    1,024,240
    
    
    
    1,994,790
    
    
    
    65,180
    
    
    
    2,011,310
    
    
    
    54,000
    
    
    
    68,355Chairman and Chief Executive Officer
    
    2004
    
    
    962,133
    
    
    
    1,558,000
    
    
    
    59,056
    
    
    
    1,316,920
    
    
    
    57,000
    
    
    
    62,2972003
    
    
    772,086
    
    
    
    537,000
    
    
    
    62,592
    
    
    
    726,024
    
    
    
    72,000
    
    
    
    52,057Peter C. Jones
    
    2005
    
    
    722,750
    
    
    
    935,032
    
    
    
    41,948
    
    
    
    726,880
    
    
    
    37,000
    
    
    
    39,466President and Chief Operating Officer
    
    2004
    
    
    686,067
    
    
    
    874,940
    
    
    
    42,197
    
    
    
    697,000
    
    
    
    40,000
    
    
    
    37,8692003
    
    
    542,967
    
    
    
    305,016
    
    
    
    36,768
    
    
    
    413,848
    
    
    
    48,000
    
    
    
    30,828Peter J. Goudie
    
    2005
    
    
    500,418
    
    
    
    578,200
    
    
    
    34,692
    
    
    
    505,512
    
    
    
    26,000
    
    
    
    28,082Executive Vice-President, Marketing
    
    2004
    
    
    472,183
    
    
    
    533,000
    
    
    
    34,620
    
    
    
    383,760
    
    
    
    28,000
    
    
    
    26,0642003
    
    
    373,752
    
    
    
    179,000
    
    
    
    30,230
    
    
    
    221,960
    
    
    
    32,000
    
    
    
    20,762Stuart F. Feiner
    
    2005
    
    
    493,535
    
    
    
    578,200
    
    
    
    43,778
    
    
    
    465,864
    
    
    
    26,000
    
    
    
    26,950Executive Vice-President,
    
    2004
    
    
    476,967
    
    
    
    482,160
    
    
    
    44,633
    
    
    
    359,980
    
    
    
    28,000
    
    
    
    26,328General Counsel and Secretary
    
    2003
    
    
    401,556
    
    
    
    179,000
    
    
    
    38,972
    
    
    
    221,960
    
    
    
    32,000
    
    
    
    21,505Ronald C. Aelick(7)
    
    2005
    
    
    425,390
    
    
    
    440,258
    
    
    
    72,075
    
    
    
    401,436
    
    
    
    22,000
    
    
    
    23,229Executive Vice-President,
    
    2004
    
    
    405,217
    
    
    
    369,000
    
    
    
    76,827
    
    
    
    287,000
    
    
    
    28,000
    
    
    
    22,177Technical Services
    
    2003
    
    
    328,524
    
    
    
    147,496
    
    
    
    69,534
    
    
    
    183,296
    
    
    
    28,000
    
    
    
    17,264  (1)
    All salaries, bonuses and other compensation shown were paid in
    Canadian dollars. They have been converted into
    U.S. dollars at the average rate of exchange for the
    applicable year as follows: for 2005, Cdn.$1.00 = U.S.$0.826;
    for 2004, Cdn.$1.00 = U.S.$0.820; and for 2003, Cdn.$1.00 =
    U.S.$0.716. Accordingly, increases in the salaries, bonuses and
    other compensation shown above reflect both absolute increases
    in the amounts of such salaries, bonuses and other compensation
    paid in Canadian dollars and increases attributable to changes
    in the rate of exchange between Canadian dollars and
    U.S. dollars for the applicable periods. For example,
    between 2004 and 2005, the salaries of the named Executive
    Officers increased 2.7%-5.7% in Canadian dollar terms, or
    3.5%-6.5% when converted into U.S. dollars for the purposes
    of this table.(2)
    The amounts shown represent cash bonus awards granted pursuant
    to the Companys annual Management Incentive Plans
    (described below). Awards earned in a particular year are paid
    in February of the immediately succeeding year. For the purposes
    of this table, the Company reports these awards in the year in
    which they were earned, rather than in the year in which they
    were actually paid. See Report on Executive
    Compensation, beginning on page 34.(3)
    Consists of (a) an annual perquisite allowance of
    approximately $33,000; (b) for certain named Executives
    Officers, tax preparation services, financial planning services
    and/or an allocation for personal use of a Company car and
    driver, and (c) for Mr. Aelick, housing assistance of
    approximately $40,000 per annum.(4)
    The amounts shown represent awards of restricted Common Shares
    and cash in an amount generally sufficient to cover tax
    liabilities in respect of the award. These awards were made
    pursuant to the Companys Mid-Term Incentive Plan
    (described below). Awards earned in a particular year are paid
    in February of the immediately succeeding year. The Company
    reports these awards in the year in which they were earned,
    rather than the year in which they were actually paid. The
    restricted Common Shares comprising part of such awards have
    been valued, for the purposes of the Summary Compensation Table,
    at the average of the high and low sales prices of the Common
    Shares on the Toronto Stock Exchange on the date of the award,
    which amount has been converted into U.S. dollars at the
    average rate of exchange for the year in which the awards were
    earned. The restricted Common Shares awarded in respect of 2005
    may not be transferred, sold or encumbered for a three-year
    period ending in February 2008, unless the awardee retires
    during such period, and will generally be subject to forfeiture
    within that three-year period if such restrictions have been
    violated by the awardee or the awardee leaves employment
    voluntarily (other than by reason of retirement or death) or is
    terminated for cause. Such restricted Common Shares will be held
    by the Company for the three-year period, but the awardee will
    have all rights as a holder of such shares, including rights to
    dividends, if any. The aggregate number and value of restricted
    Common Shares held by the Executive Officers as at
    February 17, 2006, based on the closing price of the Common
    Shares on the New York Stock Exchange on December 30, 2005
    (being $43.57), is set forth in the following table: Number of RestrictedExecutive Officer
    
    Common Shares Held
    
    Value($)Scott M. Hand
    
    
    48,241
    
    
    
    2,101,860Peter C. Jones
    
    
    22,450
    
    
    
    978,147Peter J. Goudie
    
    
    13,399
    
    
    
    583,794Stuart F. Feiner
    
    
    12,679
    
    
    
    552,424Ronald C. Aelick
    
    
    10,520
    
    
    
    458,356 26




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The restricted Common Shares shown
    in the table above have been included in the number of Common
    Shares shown to be beneficially owned by such Executive Officers
    in the table included under the heading Security Holdings
    of Directors and Officers, beginning on page 39.(5)
    The amounts shown represent options
    and related share appreciation rights (SARs) granted
    under the Companys 2001 Key Employees Incentive Plan
    (described below). Grants of options and related SARs are
    reported in the year in which they are made.(6)
    Consists of (a) annual
    contributions made by the Company under the Companys
    contributory security reserve plans (see page 32), and
    (b) insurance premiums paid by the Company for the benefit
    of the named Executive Officer for group term life insurance
    (see page 33).(7)
    Mr. Aelick became Executive
    Vice President, Technical Services effective October 1,
    2005. From November 7, 2001 to April 20, 2004, he
    served as President, Canada and U.K. Operations and from
    April 20, 2004 to October 1, 2005, he served as
    Executive Vice President and President, Canadian and U.K.
    Operations. Incentive Compensation Plans
    27




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28




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Securities Authorized for Issuance Under the Companys
Equity Compensation Plans
  (C)Number of Remaining(A)
    
    
    
    Securities AvailableNumber of Securities
    
    (B)
    
    for Future Issuanceto be Issued Upon
    
    Weighted Average
    
    Under EquityExercise of
    
    Exercise Price of
    
    Compensation PlansOutstanding
    
    Outstanding
    
    (Excluding SecuritiesOptions, Warrants
    
    Options, Warrants
    
    Reflected in ColumnPlan Category
    
    and Rights(1)
    
    and Rights
    
    (A))(2)Equity compensation plans approved by security holders
    
    
    3,116,261
    
    
    $
    30.98
    
    
    
    7,773,950Equity compensation plans not approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    3,116,261
    
    
    $
    30.98
    
    
    
    7,773,950 
  (1)
    Consists of Common Shares authorized for issuance upon the
    exercise of options outstanding as of December 31, 2005
    under (i) the 1993 and 1997 Key Employee Incentive Plans
    which have expired and under which no further options may be
    granted, (ii) the 2001 Key Employees Incentive Plan (the
    2001 KEIP), (iii) the 2005 Key Employees
    Incentive Plan (the 2005 KEIP), and (iv) the
    2002 Non-Employee Director Share Option Plan (the 2002
    NEDSOP) which was suspended by Incos Board of
    Directors as of February 3, 2004.(2)
    Consists of Common Shares authorized for issuance as of
    December 31, 2005 pursuant to the exercise of options which
    may be granted under the 2001 KEIP (1,773,950) and the 2005 KEIP
    (5,500,000) or pursuant to restricted share awards under the
    2005 KEIP (500,000). Does not include 200,000 Common Shares
    available for future issuance under the 2002 NEDSOP, given the
    Boards decision to suspend option grants under that plan.
    The 2001 KEIP is nearing the end of its term. No share options/
    SARs may be granted under the 2001 KEIP after April 24,
    2006 and no incentive compensation awards may be made under the
    2001 KEIP in respect of any financial year after
    December 31, 2006. 29




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##### Table of Contents



Share Option Grants and Exercises by the Named Executive
Officers
  
  
 Individual GrantsNumber of
    
    % of TotalSecurities
    
    OptionsUnderlying
    
    Granted to
    
    Exercise orOptions
    
    Employees
    
    Base Price
    
    Expiration
    
    Grant DateName
    
    Granted(#)(1)
    
    in 2005
    
    ($/share)(2)
    
    Date
    
    Value(U.S.$)(3)Scott M. Hand
    
    
    54,000
    
    
    
    5.10
    %
    
    $
    39.67
    
    
    
    2/21/2015
    
    
    $
    660,935Peter C. Jones
    
    
    37,000
    
    
    
    3.49
    %
    
    $
    39.67
    
    
    
    2/21/2015
    
    
    $
    452,863Peter J. Goudie
    
    
    26,000
    
    
    
    2.45
    %
    
    $
    39.67
    
    
    
    2/21/2015
    
    
    $
    318,228Stuart F. Feiner
    
    
    26,000
    
    
    
    2.45
    %
    
    $
    39.67
    
    
    
    2/21/2015
    
    
    $
    318,228Ronald C. Aelick
    
    
    22,000
    
    
    
    2.08
    %
    
    $
    39.67
    
    
    
    2/21/2015
    
    
    $
    269,270 
  (1)
    Half of the options became exercisable on August 22, 2005
    and the remaining half will become exercisable on
    August 22, 2006.(2)
    The exercise price of the options is the average of the high and
    low sales prices for the Common Shares reported on the New York
    Stock Exchange on February 22, 2005, the date of the grant.(3)
    This estimate of value has been developed for the purpose of
    comparative disclosure in accordance with the rules and
    regulations of the U.S. Securities and Exchange Commission
    and is consistent with the assumptions that the Company is using
    for Statement of Financial Accounting Standards
    (SFAS) 123 reporting purposes. The estimated value
    has been determined by application of the Black-Scholes option
    pricing model, based upon the terms of the option grant and the
    Companys share price performance history as at the date of
    the grant. The key assumptions used in this model (as at
    February 25, 2005) are as follows: dividend yield: 0%;
    volatility: 34.8%; risk-free rate of return: 3.62%; and expected
    exercise period: 3.6 years. No adjustment has been made for
    risk of forfeiture or limitations on transferability. The
    assumptions used in the valuation are based upon experience and
    are not a forecast of future stock price or volatility or of
    future dividend policy.  
   
 Value
    
    Number of Securities
    
    Value of UnexercisedCommon
    
    Realized
    
    Underlying Unexercised
    
    In the MoneyShares
    
    on
    
    Options/SARs at
    
    Options/SARs atAcquired on
    
    Exercise
    
    Year-End 2005 (#)
    
    Year-End 2005($)Name
    
    Exercise(#)
    
    ($)(1)
    
    (Exercisable/Unexercisable)
    
    (Exercisable/Unexercisable)(2)Scott M. Hand
    
    
    202,000
    
    
    
    3,680,400
    
    
    
    281,000/27,000
    
    
    
    4,357,760/105,300Peter C. Jones
    
    
    148,100
    
    
    
    3,155,072
    
    
    
    154,300/18,500
    
    
    
    2,694,276/72,150Peter J. Goudie
    
    
    0
    
    
    
    0
    
    
    
    296,000/13,000
    
    
    
    6,562,310/50,700Stuart F. Feiner
    
    
    85,000
    
    
    
    1,192,530
    
    
    
    49,000/13,000
    
    
    
    415,990/50,700Ronald C. Aelick
    
    
    16,000
    
    
    
    115,200
    
    
    
    84,000/11,000
    
    
    
    1,037,240/42,900 
  (1)
    The amounts shown represent the difference been the aggregate
    value of the Common Shares underlying the exercised options/
    SARs (based on the average of the high and low sales prices of
    the Common Shares on the New York Stock Exchange on the date of
    exercise) and the aggregate exercise price of such options/ SARs.(2)
    For the purposes of this table, options/ SARs are
    in-the-money
    if the closing price of the Common Shares on the New York Stock
    Exchange on December 30, 2005 (being $43.57) is greater
    than the exercise price of the options/ SARs. Termination of Employment and Change in Control
Arrangements
  30




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Retirement Plans
   31




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##### Table of Contents



Approximate Maximum Annual PensionYears of Credited Service(2)Final Average AnnualCompensation(1)
    
    10
    
    15
    
    20
    
    25
    
    30
    
    35
    
    40
    
    45600,000
    
    
    87,800
    
    
    
    131,700
    
    
    
    175,600
    
    
    
    219,500
    
    
    
    263,400
    
    
    
    307,300
    
    
    
    351,700
    
    
    
    396,200800,000
    
    
    117,800
    
    
    
    176,700
    
    
    
    235,600
    
    
    
    294,500
    
    
    
    353,400
    
    
    
    412,300
    
    
    
    471,700
    
    
    
    531,2001,000,000
    
    
    147,800
    
    
    
    221,700
    
    
    
    295,600
    
    
    
    369,500
    
    
    
    443,400
    
    
    
    517,300
    
    
    
    591,700
    
    
    
    666,2001,200,000
    
    
    177,800
    
    
    
    266,700
    
    
    
    355,600
    
    
    
    444,500
    
    
    
    533,400
    
    
    
    622,300
    
    
    
    711,700
    
    
    
    801,2001,400,000
    
    
    207,800
    
    
    
    311,700
    
    
    
    415,600
    
    
    
    519,500
    
    
    
    623,400
    
    
    
    727,300
    
    
    
    831,700
    
    
    
    936,2001,600,000
    
    
    237,800
    
    
    
    356,700
    
    
    
    475,600
    
    
    
    594,500
    
    
    
    713,400
    
    
    
    832,300
    
    
    
    951,700
    
    
    
    1,071,2001,800,000
    
    
    267,800
    
    
    
    401,700
    
    
    
    535,600
    
    
    
    669,500
    
    
    
    803,400
    
    
    
    937,300
    
    
    
    1,071,700
    
    
    
    1,206,2002,000,000
    
    
    297,800
    
    
    
    446,700
    
    
    
    595,600
    
    
    
    744,500
    
    
    
    893,400
    
    
    
    1,042,300
    
    
    
    1,191,700
    
    
    
    1,341,2002,200,000
    
    
    327,800
    
    
    
    491,700
    
    
    
    655,600
    
    
    
    819,500
    
    
    
    983,400
    
    
    
    1,147,300
    
    
    
    1,311,700
    
    
    
    1,476,2002,400,000
    
    
    357,800
    
    
    
    536,700
    
    
    
    715,600
    
    
    
    894,500
    
    
    
    1,073,400
    
    
    
    1,252,300
    
    
    
    1,431,700
    
    
    
    1,611,2002,600,000
    
    
    387,800
    
    
    
    581,700
    
    
    
    775,600
    
    
    
    969,500
    
    
    
    1,163,400
    
    
    
    1,357,300
    
    
    
    1,551,700
    
    
    
    1,746,2002,800,000
    
    
    417,800
    
    
    
    626,700
    
    
    
    835,600
    
    
    
    1,044,500
    
    
    
    1,253,400
    
    
    
    1,462,300
    
    
    
    1,671,700
    
    
    
    1,881,2003,000,000
    
    
    447,800
    
    
    
    671,700
    
    
    
    895,600
    
    
    
    1,119,500
    
    
    
    1,343,400
    
    
    
    1,567,300
    
    
    
    1,791,700
    
    
    
    2,016,200 
  (1)
    The compensation covered by the retirement plans is composed of
    base salary and target bonus awards which may be payable under
    the Companys annual MIP (described under Incentive
    Compensation Plans on page 27).(2)
    At age 65, Messrs. Hand, Jones, Goudie, Feiner and
    Aelick will have 34, 16, 43, 37 and 41 years of
    credited service, respectively. As of February 17, 2006,
    Messrs. Hand, Jones, Goudie, Feiner and Aelick had
    32, 9, 35, 30 and 33 years of credited service,
    respectively. Two of these officers have certain rights under
    supplemental retirement benefit agreements to elect to receive
    their pension in a lump sum, calculated based upon years of
    credited service and the prevailing discount rate.  Security Reserve Plans
    32




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##### Table of Contents



Life Insurance
  Directors and Officers Liability Insurance
  Compensation Committee Interlocks and Insider Participation
in Compensation Decisions
  33




---



##### Table of Contents



REPORT ON EXECUTIVE COMPENSATION
  Member
    
    Service on Other Board Committee(s)David P. OBrien (Chair)
    
    Corporate Governance and Nominating CommitteeRonald C. Cambre
    
    Audit Committee, Capital Projects CommitteeRoger Phillips
    
    Environment, Health and Safety CommitteeRichard E. Waugh
    
    Pension Committee Approach to Executive Compensation
    Base Salaries
  34




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##### Table of Contents



Incentive Compensation
  Annual MIP Awards
  35




---



##### Table of Contents



Awards Under MTIP
  Share Option Awards
  Share Ownership Requirements
  36




---



##### Table of Contents



37




---



##### Table of Contents



COMPARATIVE SHAREHOLDER RETURN
  Comparison of Five-Year Cumulative Total Return on Common
Shares
 December 31, 2000  December 31, 2005
 
 
  
 2000
    
    2001
    
    2002
    
    2003
    
    2004
    
    2005Inco Limited
    
    
    100.00
    
    
    
    101.07
    
    
    
    126.61
    
    
    
    237.59
    
    
    
    219.45
    
    
    
    276.21S&P 500 Stock Index(1)
    
    
    100.00
    
    
    
    88.11
    
    
    
    68.64
    
    
    
    88.33
    
    
    
    97.94
    
    
    
    102.75S&P/ TSX Composite Index(2)
    
    
    100.00
    
    
    
    107.41
    
    
    
    82.83
    
    
    
    104.20
    
    
    
    119.29
    
    
    
    148.07S&P/ TSX Capped Diversified Metals & Mining Index(3)
    
    
    100.00
    
    
    
    112.52
    
    
    
    122.49
    
    
    
    218.77
    
    
    
    255.46
    
    
    
    376.05 
  (1)
    The S&P 500 Stock Index is a broad market-weighted index of
    500 companies designed to provide a measure of
    U.S. stock market performance. The Company was included in
    this index until July 2002, when Standard & Poors
    Corporation deleted
    non-U.S.companies,
    including the Company, from this index.(2)
    The S&P/ TSX Composite Index is a broad market-weighted
    index of 300 companies on the Toronto Stock Exchange,
    including the Company.(3)
    The S&P/ TSX Capped Diversified Metals & Mining
    Index is a sub-index of the S&P/ TSX Composite Index that
    presently includes fourteen companies, including the Company.
    The index is subject to a cap so that no single issue may
    comprise more than 25% of the index. 38




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##### Table of Contents



PART V  OWNERSHIP OF SECURITIES
 
 SIGNIFICANT SECURITY HOLDERS
  Beneficial
    
    PercentName and Address of Beneficial Owner
    
    Class
    
    Ownership
    
    of ClassCapital Group International, Inc.
    
    
    Common Shares
    
    
    
    15,084,780
    (1)
    
    
    7.8%11100 Santa Monica BoulevardLos Angeles, California 90025 
  (1)
    Represents beneficial ownership as of December 31, 2005,
    according to the Schedule 13G filed by Capital Group
    International, Inc. (CGII) on February 2, 2006.
    CGII is the parent holding company of a group of investment
    management companies that hold investment power and, in some
    cases, voting power over the securities reported in such
    Schedule 13G. Although CGII does not have investment power
    or voting power over these securities, by virtue of
    Rule 13d-3 under
    the U.S. Securities Exchange Act of 1934, CGII may be
    deemed to beneficially own 15,084,780 Common Shares.
    These Common Shares include (i) 21,680 Common Shares
    resulting from the assumed conversion of $563,900 principal
    amount of the Companys
    31/2% Subordinated
    Convertible Debentures due 2052, and (ii) 53,920 Common
    Shares resulting from the assumed conversion of $2,030,700
    principal amount of the Companys zero coupon convertible
    notes due 2021 (the LYON Notes). 
 SECURITY HOLDINGS OF DIRECTORS AND EXECUTIVE OFFICERS
 1 2
 BeneficialOwnership(excludingOptions/SARs
    
    
    
    Deferredand Deferred
    
    Options/
    
    Share
    
    
    
    Percent ofName of Beneficial Owner
    
    Class
    
    Share Units)(1)
    
    SARs(2)
    
    Units(3)
    
    Total
    
    Class(4)Glen A. Barton
    
    Common Shares
    
    
    21,323
    
    
    
    10,000
    
    
    
    6,484
    
    
    
    37,807
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Angus A. Bruneau
    
    Common Shares
    
    
    5,745
    
    
    
    0
    
    
    
    11,866
    
    
    
    17,611
    
    
    
    *Warrants
    
    
    1,125
    
    
    
    
    
    
    
    
    
    
    
    1,125
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Ronald C. Cambre
    
    Common Shares
    
    
    0
    
    
    
    10,000
    
    
    
    11,611
    
    
    
    21,611
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Janice K. Henry
    
    Common Shares
    
    
    0
    
    
    
    0
    
    
    
    6,131
    
    
    
    6,131
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Chaviva M. Hoek
    
    Common Shares
    
    
    0
    
    
    
    10,000
    
    
    
    10,455
    
    
    
    20,455
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *John T. Mayberry
    
    Common Shares
    
    
    3,000
    
    
    
    0
    
    
    
    8,072
    
    
    
    11,063
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    * 39




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##### Table of Contents



BeneficialOwnership(excludingOptions/SARs
    
    
    
    Deferredand Deferred
    
    Options/
    
    Share
    
    
    
    Percent ofName of Beneficial Owner
    
    Class
    
    Share Units)(1)
    
    SARs(2)
    
    Units(3)
    
    Total
    
    Class(4)Francis Mer
    
    Common Shares
    
    
    788
    
    
    
    0
    
    
    
    1,130
    
    
    
    1,918
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *David P. OBrien
    
    Common Shares
    
    
    7,942
    
    
    
    10,000
    
    
    
    10,449
    
    
    
    28,391
    
    
    
    *Warrants
    
    
    225
    
    
    
    
    
    
    
    
    
    
    
    225
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Roger Phillips
    
    Common Shares
    
    
    7,000
    
    
    
    5,000
    
    
    
    8,396
    
    
    
    20,396
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Richard E. Waugh
    
    Common Shares
    
    
    0
    
    
    
    0
    
    
    
    2,185
    
    
    
    2,185
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Scott M. Hand
    
    Common Shares
    
    
    222,579
    (5)
    
    
    308,000
    
    
    
    
    
    
    
    530,579
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    *Peter C. Jones
    
    Common Shares
    
    
    61,354
    
    
    
    172,800
    
    
    
    
    
    
    
    234,154
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    76,000
    
    
    
    
    
    
    
    
    
    
    
    76,000
    
    
    
    *Peter J. Goudie
    
    Common Shares
    
    
    21,135
    
    
    
    309,000
    
    
    
    
    
    
    
    330,135
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    248,000
    
    
    
    
    
    
    
    
    
    
    
    248,000
    
    
    
    *Stuart F. Feiner
    
    Common Shares
    
    
    27,693
    
    
    
    62,000
    
    
    
    
    
    
    
    89,693
    
    
    
    *Warrants
    
    
    1,700
    
    
    
    
    
    
    
    
    
    
    
    1,700
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Ronald C. Aelick
    
    Common Shares
    
    
    19,456
    
    
    
    95,000
    
    
    
    
    
    
    
    114,456
    
    
    
    *Warrants
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *PTI Common Shares
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    *Directors and Executive
    
    Common Shares
    
    
    445,887
    
    
    
    1,339,800
    
    
    
    76,779
    
    
    
    1,862,466
    
    
    
    *Officers as a group,
    
    Warrants
    
    
    3,050
    
    
    
    
    
    
    
    
    
    
    
    3,050
    
    
    
    *30 persons in total,
    
    PTI Common Shares
    
    
    524,000
    
    
    
    
    
    
    
    
    
    
    
    524,000
    
    
    
    *including those individuals
    listed above 
  (1)
    For purposes of the table, beneficial ownership is
    determined pursuant to
    Rule 13d-3 under
    the U.S. Securities Exchange Act of 1934, as amended,
    pursuant to which a person or group of persons is deemed to have
    beneficial ownership of a class of outstanding
    shares which such person or group has the right to acquire
    within 60 days after February 17, 2006. The
    individuals named herein have sole voting power and investment
    power with respect to the Common Shares, Warrants and PTI Common
    Shares shown in the table as being beneficially owned by them,
    except as otherwise noted in footnote (5) below.(2)
    The options shown in this column may be exercised to acquire an
    equivalent number of Common Shares as at February 17, 2006
    or within 60 days of February 17, 2006. The options
    were granted pursuant to the 2001 KEIP, the Directors
    Option Plan or certain predecessor plans. The term
    SARs refers to share appreciation rights related to
    options granted under the 2001 KEIP and certain of its
    predecessor plans.(3)
    This column shows whole Deferred Share Units credited to the
    account of a non-executive Director pursuant to the Ownership
    Plan (see Directors Compensation in 2005 at
    page 24).(4)
    For purposes of computing the percentage of the outstanding
    class of shares held by each person or group named above, any
    shares which such person or group has the right to acquire
    within 60 days after February 17, 2006 are deemed to
    be outstanding, except for the purpose of computing the
    percentage ownership of any other person. As of
    February 17, 2006, 192,769,128 Common Shares, 11,012,783
    Warrants and 993,633,872 PTI Common Shares were issued and
    outstanding.(5)
    Includes an aggregate of 174,116 Common Shares held jointly by
    Mr. Hand and his spouse. Also includes an aggregate of 222
    Common Shares held by Mr. Hand for the benefit of one of
    his children, as to which he disclaims any beneficial ownership.  *
    Less than 1% 40




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##### Table of Contents



PART VI  OTHER INFORMATION
 
 SOLICITATION OF PROXIES
 th out-of
 
 SHAREHOLDER PROPOSALS FOR 2007 ANNUAL MEETING
  
 ADDITIONAL INFORMATION ABOUT THE COMPANY
 www.sedar.com www.inco.com
 Copies of the Companys latest Annual Report on
Form 10-K, Annual
Report to Shareholders and this Proxy Circular and Statement may
be obtained upon request to the Companys Director of
Investor Relations.
 
 DIRECTORS APPROVAL
  
  Executive Vice-President, General Counsel &
Secretary
 41