##### Table of Contents



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SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q





|  |  |                                                                                            
|- |  | -------------------------------------------------------------------------------------------
|þ |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

| |  |                                              
| |  | ---------------------------------------------
| |  | For the quarterly period ended: June 30, 2005

Commission file number 1-1143


Inco Limited


(Name of Registrant as specified in its charter)


|                                      |  |                                               
|------------------------------------- |  | ----------------------------------------------
|Canada(Jurisdiction of Incorporation) |  | 98-0000676(I.R.S. Employer Identification No.)

145 King Street West, Suite 1500, Toronto, Ontario
M5H 4B7*


(Address of principal executive offices, including zip
code)


(416) 361-7511


(Telephone number)




















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TABLE OF CONTENTS


|                                   |  |                                                                                                                                                                                                                       |  |          |    | 
|---------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | -- | 
|                                   |  |                                                                                                                                                                                                                       |  | Page No. |   
|                                   |  |                                                                                                                                                                                                                       |  |          |   
|PART I  FINANCIAL
    INFORMATION
|Item 1.                            |  | Financial Statements
    (Unaudited)  Inco Limited and Subsidiaries                                                                                                                                                  |  |          | 2  | 
|                                   |  | Consolidated Statement of Earnings
    (Unaudited)  Three and Six Months Ended June 30,
    2005 and 2004                                                                                                            |  |          | 2  | 
|                                   |  | Consolidated Statement of Retained Earnings
    (Deficit) (Unaudited)  Six Months Ended June 30,
    2005 and 2004                                                                                                   |  |          | 3  | 
|                                   |  | Consolidated Balance Sheet
    (Unaudited)  June 30, 2005 and December 31,
    2004                                                                                                                                  |  |          | 4  | 
|                                   |  | Consolidated Statements of Cash Flows
    (Unaudited)  Three and Six Months
    Ended June 30, 2005 and 2004                                                                                                         |  |          | 5  | 
|                                   |  | Notes to Consolidated Financial Statements
    (Unaudited)                                                                                                                                                            |  |          | 6  | 
|Item 2.                            |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                                                                                                             |  |          | 20 | 
|Item 3.                            |  | Quantitative and Qualitative Disclosures
    About Market Risks                                                                                                                                                       |  |          | 32 | 
|Item 4.                            |  | Controls and Procedures                                                                                                                                                                                               |  |          | 33 | 
|                                  
|PART II  OTHER
    INFORMATION   
|Item 4.                            |  | Submission of Matters to a Vote of Security
    Holders                                                                                                                                                               |  |          | 34 | 
|Item 5.                            |  | Other Information                                                                                                                                                                                                     |  |          | 35 | 
|Item 6.                            |  | Exhibits                                                                                                                                                                                                              |  |          | 35 | 
|                                   |  | 31.1. Certification of the Chief Executive Officer of the
    Registrant pursuant to Rule 13a - 14(a) of the
    U.S. Securities Exchange Act of 1934, as amended                                                     |  |          |    | 
|                                   |  | 31.2. Certification of the Chief Financial Officer of the
    Registrant pursuant to Rule 13a - 14(a) of the
    U.S. Securities Exchange Act of 1934, as amended                                                     |  |          |    | 
|                                   |  | 32.1. Certification of the Chief Executive Officer and
    Chief Financial Officer of the Registrant pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002 |  |          |    | 
|EXHIBIT 31.1                      
|EXHIBIT 31.2                      
|EXHIBIT 32.1                      



1



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##### Table of Contents






PART I  FINANCIAL INFORMATION







|        |                     
|------- | --------------------
|Item 1. | Financial Statements

INCO LIMITED AND SUBSIDIARIES





Consolidated Statement of Earnings


(Unaudited)


|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |      |  |   |       |      | 
|-------------------------------------------------------------------------- | ------- | ------------------ | ----- | ---------- | ---------------- | - | ----- | ----- | ---------- | - | ----- | ---- |  | - | ----- | ---- | 
|                                                                           |         | Three Months Ended |       |            | Six Months Ended |  
|                                                                           |         | June 30,           |       |            | June 30,         |  
|                                                                           |         |                    |       |            |                  |  
|                                                                           |         | 2005               |       |            | 2004             |   |       | 2005  |            |   | 2004  |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|                                                                           |         |                    |       | (Restated) |                  |   |       |       | (Restated) |  
|(in millions of United States dollars except per share
    amounts)        |         |                    |       |            |                  |   |       |       |            |   |       |      |  |   |       |     
|Revenues                                                                   |         |                    |       |            |                  |   |       |       |            |   |       |      |  |   |       |     
|Net sales                                                                  |         | $                  | 1,194 |            |                  | $ | 992   |       |            | $ | 2,315 |      |  | $ | 2,086 |     
|Other income, net (Note 3)                                                 |         |                    | 2     |            |                  |   | 10    |       |            |   | 3     |      |  |   | 15    |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|                                                                           |         |                    | 1,196 |            |                  |   | 1,002 |       |            |   | 2,318 |      |  |   | 2,101 |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|Costs and expenses (income)                                                |         |                    |       |            |                  |   |       |       |            |   |       |      |  |   |       |     
|Cost of sales and other expenses, excluding depreciation and
    depletion |         |                    | 616   |            |                  |   | 580   |       |            |   | 1,219 |      |  |   | 1,137 |     
|Depreciation and depletion                                                 |         |                    | 64    |            |                  |   | 62    |       |            |   | 125   |      |  |   | 119   |     
|Selling, general and administrative                                        |         |                    | 49    |            |                  |   | 41    |       |            |   | 92    |      |  |   | 75    |     
|Research and development                                                   |         |                    | 7     |            |                  |   | 7     |       |            |   | 14    |      |  |   | 16    |     
|Exploration                                                                |         |                    | 11    |            |                  |   | 6     |       |            |   | 20    |      |  |   | 12    |     
|Currency translation adjustments                                           |         |                    | 1     |            |                  |   | (18   | )     |            |   | (4    | )    |  |   | (33   | )   
|Interest expense                                                           |         |                    | 5     |            |                  |   | 9     |       |            |   | 12    |      |  |   | 20    |     
|Asset impairment charge (Note 4)                                           |         |                    | 25    |            |                  |   | 201   |       |            |   | 25    |      |  |   | 201   |     
|Goro project suspension                                                    |         |                    |      |            |                  |   | 3     |       |            |   |      |      |  |   | (3    | )   
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|                                                                           |         |                    | 778   |            |                  |   | 891   |       |            |   | 1,503 |      |  |   | 1,544 |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|Earnings before income and mining taxes and minority interest              |         |                    | 418   |            |                  |   | 111   |       |            |   | 815   |      |  |   | 557   |     
|Income and mining taxes (Note 5)                                           |         |                    | 166   |            |                  |   | 103   |       |            |   | 248   |      |  |   | 261   |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|Earnings before minority interest                                          |         |                    | 252   |            |                  |   | 8     |       |            |   | 567   |      |  |   | 296   |     
|Minority interest (Note 16)                                                |         |                    | 37    |            |                  |   | 22    |       |            |   | 39    |      |  |   | 56    |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|Net earnings (loss)                                                        |         | $                  | 215   |            |                  | $ | (14   | )     |            | $ | 528   |      |  | $ | 240   |     
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|Net earnings (loss) per common share (Note 8)                              |         |                    |       |            |                  |   |       |       |            |   |       |      |  |   |       |     
|                                                                           | Basic   |                    | $     | 1.14       |                  |   | $     | (0.07 | )          |   | $     | 2.80 |  |   | $     | 1.28 | 
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     
|                                                                           | Diluted |                    | $     | 0.98       |                  |   | $     | (0.07 | )          |   | $     | 2.41 |  |   | $     | 1.20 | 
|                                                                           |         |                    |       |            |                  |   |       |       |            |   |       |     



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##### Table of Contents



INCO LIMITED AND SUBSIDIARIES





Consolidated Statement of Retained Earnings (Deficit)


(Unaudited)


|                                                                               |  |                  |     |            |      |   |      |  
|------------------------------------------------------------------------------ |  | ---------------- | --- | ---------- | ---- | - | ---- | -
|                                                                               |  | Six Months Ended |    
|                                                                               |  | June 30,         |    
|                                                                               |  |                  |    
|                                                                               |  | 2005             |     |            | 2004 |  
|                                                                               |  |                  |     |            |      |  
|                                                                               |  |                  |     | (Restated) |     
|(in millions of United States dollars)                                         |  |                  |     |            |      |   |      |  
|Retained earnings (deficit) at beginning of period, as
    previously reported |  | $                | 397 |            |      | $ | (206 | )
|Change in accounting policy (Note 2)                                           |  |                  | (7  | )          |      |   | (9   | )
|                                                                               |  |                  |     |            |      |  
|Retained earnings (deficit) at beginning of year, as restated                  |  |                  | 390 |            |      |   | (215 | )
|Net earnings                                                                   |  |                  | 528 |            |      |   | 240  |  
|Common dividends paid                                                          |  |                  | (19 | )          |      |   |     |  
|                                                                               |  |                  |     |            |      |  
|Retained earnings at end of period                                             |  | $                | 899 |            |      | $ | 25   |  
|                                                                               |  |                  |     |            |      |  



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INCO LIMITED AND SUBSIDIARIES





Consolidated Balance Sheet


(Unaudited)


|                                                   |                                                                                           |          |        |            |              |   |        |       | 
|-------------------------------------------------- | ----------------------------------------------------------------------------------------- | -------- | ------ | ---------- | ------------ | - | ------ | ----- | 
|                                                   |                                                                                           | June 30, |        |            | December 31, |  
|                                                   |                                                                                           | 2005     |        |            | 2004         |  
|                                                   |                                                                                           |          |        |            |              |  
|                                                   |                                                                                           |          |        | (Restated) |             
|(in millions of United States dollars)             |                                                                                           |          |        |            |              |   |        |      
|ASSETS                                            
|Current assets                                     |                                                                                           |          |        |            |              |   |        |      
|Cash and cash equivalents (Note 14)                |                                                                                           | $        | 1,173  |            |              | $ | 1,076  |      
|Accounts receivable                                |                                                                                           |          | 556    |            |              |   | 601    |      
|Inventories (Note 14)                              |                                                                                           |          | 901    |            |              |   | 834    |      
|Other                                              |                                                                                           |          | 114    |            |              |   | 63     |      
|                                                   |                                                                                           |          |        |            |              |  
|Total current assets                               |                                                                                           |          | 2,744  |            |              |   | 2,574  |      
|Property, plant and equipment (Note 14)            |                                                                                           |          | 7,917  |            |              |   | 7,587  |      
|Deferred charges and other assets                  |                                                                                           |          | 630    |            |              |   | 576    |      
|                                                   |                                                                                           |          |        |            |              |  
|Total assets                                       |                                                                                           | $        | 11,291 |            |              | $ | 10,737 |      
|                                                   |                                                                                           |          |        |            |              |  
|                                                  
|LIABILITIES AND SHAREHOLDERS EQUITY              
|Current liabilities                                |                                                                                           |          |        |            |              |   |        |      
|Long-term debt due within one year (Notes 2 and 9) |                                                                                           | $        | 113    |            |              | $ | 107    |      
|Accounts payable                                   |                                                                                           |          | 298    |            |              |   | 331    |      
|Accrued payrolls and benefits                      |                                                                                           |          | 193    |            |              |   | 208    |      
|Other accrued liabilities                          |                                                                                           |          | 424    |            |              |   | 399    |      
|Income and mining taxes payable                    |                                                                                           |          | 112    |            |              |   | 279    |      
|                                                   |                                                                                           |          |        |            |              |  
|Total current liabilities                          |                                                                                           |          | 1,140  |            |              |   | 1,324  |      
|Deferred credits and other liabilities             |                                                                                           |          |        |            |              |   |        |      
|Long-term debt (Notes 2 and 9)                     |                                                                                           |          | 1,727  |            |              |   | 1,761  |      
|Deferred income and mining taxes                   |                                                                                           |          | 1,867  |            |              |   | 1,891  |      
|Post-retirement benefits                           |                                                                                           |          | 679    |            |              |   | 671    |      
|Asset retirement obligation (Note 7)               |                                                                                           |          | 179    |            |              |   | 171    |      
|Other deferred credits                             |                                                                                           |          | 74     |            |              |   | 58     |      
|                                                   |                                                                                           |          |        |            |              |  
|Total liabilities                                  |                                                                                           |          | 5,666  |            |              |   | 5,876  |      
|                                                   |                                                                                           |          |        |            |              |  
|Minority interest (Note 16)                        |                                                                                           |          | 750    |            |              |   | 529    |      
|                                                   |                                                                                           |          |        |            |              |  
|Commitments and contingencies (Note 12)            |                                                                                           |          |        |            |              |   |        |      
|Shareholders equity                               |                                                                                           |          |        |            |              |   |        |      
|Convertible debt (Notes 2 and 10)                  |                                                                                           |          | 418    |            |              |   | 418    |      
|                                                   |                                                                                           |          |        |            |              |  
|Common shareholders equity                        |                                                                                           |          |        |            |              |   |        |      
|                                                   | Common shares issued and outstanding 189,112,817
    (2004  188,133,439 shares) (Note 8) |          |        | 2,920      |              |   |        | 2,891 | 
|                                                   | Warrants (Note 11)                                                                        |          |        | 62         |              |   |        | 62    | 
|                                                   | Contributed surplus (Note 15)                                                             |          |        | 576        |              |   |        | 571   | 
|                                                   | Retained earnings                                                                         |          |        | 899        |              |   |        | 390   | 
|                                                   |                                                                                           |          |        |            |              |  
|                                                   |                                                                                           |          | 4,457  |            |              |   | 3,914  |      
|                                                   |                                                                                           |          |        |            |              |  
|Total shareholders equity                         |                                                                                           |          | 4,875  |            |              |   | 4,332  |      
|                                                   |                                                                                           |          |        |            |              |  
|Total liabilities and shareholders equity         |                                                                                           | $        | 11,291 |            |              | $ | 10,737 |      
|                                                   |                                                                                           |          |        |            |              |  



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INCO LIMITED AND SUBSIDIARIES





Consolidated Statement of Cash Flows


(Unaudited)


|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |      |     |  
|------------------------------------------------ | ------------------------------------------------------------------------- | ---------------------------------------- | ----- | ---------- | ---------------- | - | --- | ---- | ---------- | - | ----- | ---- | ---- | - | --- | ---- | --- | -
|                                                 |                                                                           | Three Months Ended                       |       |            | Six Months Ended |  
|                                                 |                                                                           | June 30,                                 |       |            | June 30,         |  
|                                                 |                                                                           |                                          |       |            |                  |  
|                                                 |                                                                           | 2005                                     |       |            | 2004             |   |     | 2005 |            |   | 2004  |     
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|                                                 |                                                                           |                                          |       | (Restated) |                  |   |     |      | (Restated) |  
|(in millions of United States dollars)           |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |     
|Operating activities                             |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |     
|                                                 | Earnings before minority interest                                         |                                          | $     | 252        |                  |   | $   | 8    |            |   | $     | 567  |      |   | $   | 296  |    
|                                                 | Items not affecting cash                                                  |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |      |    
|                                                 |                                                                           | Depreciation and depletion               |       |            | 64               |   |     |      | 62         |   |       |      | 125  |   |     |      | 119 |  
|                                                 |                                                                           | Deferred income and mining taxes         |       |            | 10               |   |     |      | 23         |   |       |      | 5    |   |     |      | 37  |  
|                                                 |                                                                           | Asset impairment charge                  |       |            | 25               |   |     |      | 201        |   |       |      | 25   |   |     |      | 201 |  
|                                                 |                                                                           | Other                                    |       |            | 14               |   |     |      | 8          |   |       |      | 26   |   |     |      | 14  |  
|                                                 | Contributions greater than post-retirement benefits expense               |                                          |       | (5         | )                |   |     | (5   | )          |   |       | (19  | )    |   |     | (10  | )  
|                                                 | Decrease (increase) in non-cash working capital related to
    operations |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |      |    
|                                                 |                                                                           | Accounts receivable                      |       |            | 57               |   |     |      | 5          |   |       |      | 45   |   |     |      | (54 | )
|                                                 |                                                                           | Inventories                              |       |            | (11              | ) |     |      | 4          |   |       |      | (67  | ) |     |      | (93 | )
|                                                 |                                                                           | Accounts payable and accrued liabilities |       |            | (29              | ) |     |      | (24        | ) |       |      | 14   |   |     |      | 18  |  
|                                                 |                                                                           | Income and mining taxes payable          |       |            | 68               |   |     |      | 66         |   |       |      | (157 | ) |     |      | 234 |  
|                                                 |                                                                           | Other                                    |       |            | (23              | ) |     |      | (9         | ) |       |      | (51  | ) |     |      | (43 | )
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|                                                 | Net cash provided by operating activities                                 |                                          |       | 422        |                  |   |     | 339  |            |   |       | 513  |      |   |     | 719  |    
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|Investing activities                             |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |     
|                                                 | Capital expenditures                                                      |                                          |       | (279       | )                |   |     | (156 | )          |   |       | (505 | )    |   |     | (295 | )  
|                                                 | Partial sale of interest in Goro Nickel S.A.S.                            |                                          |       | 150        |                  |   |     |     |            |   |       | 150  |      |   |     |     |    
|                                                 | Other                                                                     |                                          |       | (3         | )                |   |     | 8    |            |   |       | (3   | )    |   |     | (20  | )  
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|                                                 | Net cash used for investing activities                                    |                                          |       | (132       | )                |   |     | (148 | )          |   |       | (358 | )    |   |     | (315 | )  
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|Financing activities                             |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |      |      |   |     |     
|                                                 | Repayments of long-term debt                                              |                                          |       | (13        | )                |   |     | (2   | )          |   |       | (53  | )    |   |     | (48  | )  
|                                                 | Long-term borrowings                                                      |                                          |       |           |                  |   |     |     |            |   |       | 8    |      |   |     |     |    
|                                                 | Common shares issued                                                      |                                          |       | 3          |                  |   |     | 2    |            |   |       | 23   |      |   |     | 14   |    
|                                                 | Common dividends paid                                                     |                                          |       | (19        | )                |   |     |     |            |   |       | (19  | )    |   |     |     |    
|                                                 | Dividends paid to minority interest                                       |                                          |       | (38        | )                |   |     | (14  | )          |   |       | (39  | )    |   |     | (15  | )  
|                                                 | Other                                                                     |                                          |       | 22         |                  |   |     | 1    |            |   |       | 22   |      |   |     | 1    |    
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|                                                 | Net cash used for financing activities                                    |                                          |       | (45        | )                |   |     | (13  | )          |   |       | (58  | )    |   |     | (48  | )  
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|Net increase in cash and cash equivalents        |                                                                           |                                          | 245   |            |                  |   | 178 |      |            |   | 97    |      |      |   | 356 |     
|Cash and cash equivalents at beginning of period |                                                                           |                                          | 928   |            |                  |   | 596 |      |            |   | 1,076 |      |      |   | 418 |     
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     
|Cash and cash equivalents at end of period       |                                                                           | $                                        | 1,173 |            |                  | $ | 774 |      |            | $ | 1,173 |      |      | $ | 774 |     
|                                                 |                                                                           |                                          |       |            |                  |   |     |      |            |   |       |     



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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial Statements


(Unaudited)


(Tabular amounts in millions of United States dollars except
number of shares and per share amounts)




|        |                      
|------- | ---------------------
|Note 1. | Basis of Presentation





|        |                               
|------- | ------------------------------
|Note 2. | Changes in Accounting Policies

Convertible
Debentures


Financial Instruments 
Disclosure and Presentation. 1 2 Financial Instruments that may be
Settled at the Issuers Option in Cash or its own Equity
Instruments




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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)


Recent Accounting
Pronouncements






|    |                                                                      
|--- | ---------------------------------------------------------------------
|(a) | Financial Instruments  Recognition and
    Measurement, Section 3855





|    |                     
|--- | --------------------
|(b) | Hedges, Section 3865

Hedging Relationships Foreign Currency Translation




|    |                                   
|--- | ----------------------------------
|(c) | Comprehensive Income, Section 1530







|        |                  
|------- | -----------------
|Note 3. | Other Income, net



|                                                               |  |              |    |   |            |   |    |      |  |   |      |   |  |   |    |  
|-------------------------------------------------------------- |  | ------------ | -- | - | ---------- | - | -- | ---- |  | - | ---- | - |  | - | -- | -
|                                                               |  | Three Months |    |   | Six Months |  
|                                                               |  | Ended        |    |   | Ended      |  
|                                                               |  | June 30,     |    |   | June 30,   |  
|                                                               |  |              |    |   |            |  
|                                                               |  | 2005         |    |   | 2004       |   |    | 2005 |  |   | 2004 |  
|                                                               |  |              |    |   |            |   |    |      |  |   |      |  
|Interest and dividend income                                   |  | $            | 8  |   |            | $ | 2  |      |  | $ | 15   |   |  | $ | 5  |  
|Earnings from affiliates accounted for using the equity method |  |              | 1  |   |            |   | 1  |      |  |   |     |   |  |   | 4  |  
|Losses from derivative positions in metals                     |  |              | (6 | ) |            |   |   |      |  |   | (6   | ) |  |   | (4 | )
|Gains from sales of securities and other assets                |  |              |   |   |            |   | 3  |      |  |   |     |   |  |   | 3  |  
|Other                                                          |  |              | (1 | ) |            |   | 4  |      |  |   | (6   | ) |  |   | 7  |  
|                                                               |  |              |    |   |            |   |    |      |  |   |      |  
|Other income, net                                              |  | $            | 2  |   |            | $ | 10 |      |  | $ | 3    |   |  | $ | 15 |  
|                                                               |  |              |    |   |            |   |    |      |  |   |      |  



|        |                        
|------- | -----------------------
|Note 4. | Asset Impairment Charge



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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|        |                        
|------- | -----------------------
|Note 5. | Income and Mining Taxes



|                                                                                |  |                    |     |            |                  |   |     |      |            |   |      |   |  |   |     |  
|------------------------------------------------------------------------------- |  | ------------------ | --- | ---------- | ---------------- | - | --- | ---- | ---------- | - | ---- | - |  | - | --- | -
|                                                                                |  | Three Months Ended |     |            | Six Months Ended |  
|                                                                                |  | June 30,           |     |            | June 30,         |  
|                                                                                |  |                    |     |            |                  |  
|                                                                                |  | 2005               |     |            | 2004             |   |     | 2005 |            |   | 2004 |  
|                                                                                |  |                    |     |            |                  |   |     |      |            |   |      |  
|                                                                                |  |                    |     | (Restated) |                  |   |     |      | (Restated) |  
|Provision at combined Canadian federal-provincial statutory
    income tax rate |  | $                  | 162 |            |                  | $ | 44  |      |            | $ | 316  |   |  | $ | 222 |  
|Resource and depletion allowances                                               |  |                    | (21 | )          |                  |   | (14 | )    |            |   | (38  | ) |  |   | (38 | )
|                                                                                |  |                    |     |            |                  |   |     |      |            |   |      |  
|Adjusted income taxes                                                           |  |                    | 141 |            |                  |   | 30  |      |            |   | 278  |   |  |   | 184 |  
|Mining taxes                                                                    |  |                    | 28  |            |                  |   | 15  |      |            |   | 43   |   |  |   | 39  |  
|                                                                                |  |                    |     |            |                  |   |     |      |            |   |      |  
|                                                                                |  |                    | 169 |            |                  |   | 45  |      |            |   | 321  |   |  |   | 223 |  
|Currency translation adjustments                                                |  |                    | 8   |            |                  |   | (1  | )    |            |   | 4    |   |  |   | (7  | )
|Currency translation adjustments on long-term debt                              |  |                    | (5  | )          |                  |   | (7  | )    |            |   | (7   | ) |  |   | (12 | )
|Non-taxable (gains) losses                                                      |  |                    |    |            |                  |   | 70  |      |            |   | (11  | ) |  |   | 66  |  
|Tax rate changes                                                                |  |                    |    |            |                  |   |    |      |            |   |     |   |  |   | 9   |  
|Foreign tax rate differences                                                    |  |                    | (13 | )          |                  |   | (4  | )    |            |   | (26  | ) |  |   | (22 | )
|Prior year adjustments                                                          |  |                    | 15  |            |                  |   | (2  | )    |            |   | (27  | ) |  |   | (2  | )
|Other                                                                           |  |                    | (8  | )          |                  |   | 2   |      |            |   | (6   | ) |  |   | 6   |  
|                                                                                |  |                    |     |            |                  |   |     |      |            |   |      |  
|Effective income and mining taxes                                               |  | $                  | 166 |            |                  | $ | 103 |      |            | $ | 248  |   |  | $ | 261 |  
|                                                                                |  |                    |     |            |                  |   |     |      |            |   |      |  



|        |                         
|------- | ------------------------
|Note 6. | Post-retirement Benefits



8



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##### Table of Contents



INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                                                                                     |  |                             |     |                |                           |                 |         |          |  |                |                 |  |  |      |    |  |      |   |     |      |  |   |      |   |  |   |    |  |  |   |    | 
|------------------------------------------------------------------------------------ |  | --------------------------- | --- | -------------- | ------------------------- | --------------- | ------- | -------- |  | -------------- | --------------- |  |  | ---- | -- |  | ---- | - | --- | ---- |  | - | ---- | - |  | - | -- |  |  | - | -- | 
|                                                                                     |  |                             |     |                |                           | Post-retirement |         |          |  |                | Post-retirement | 
|                                                                                     |  |                             |     | Benefits Other |                           |                 | Pension |          |  | Benefits Other |                
|                                                                                     |  | Pension Benefits            |     |                | than Pensions             |                 |         | Benefits |  |                | than Pensions   | 
|                                                                                     |  |                             |     |                |                           |                 |         |          |  |                |                 | 
|                                                                                     |  | Three Months Ended June 30, |     |                | Six Months Ended June 30, |                
|                                                                                     |  |                             |     |                |                           |                
|                                                                                     |  | 2005                        |     |                | 2004                      |                 |         | 2005     |  |                | 2004            |  |  | 2005 |    |  | 2004 |   |     | 2005 |  |   | 2004 |  
|                                                                                     |  |                             |     |                |                           |                 |         |          |  |                |                 |  |  |      |    |  |      |   |     |      |  |   |      |  
|Service cost                                                                         |  | $                           | 10  |                |                           | $               | 9       |          |  | $              | 4               |  |  | $    | 3  |  |      | $ | 20  |      |  | $ | 19   |   |  | $ | 6  |  |  | $ | 5  | 
|Interest cost                                                                        |  |                             | 42  |                |                           |                 | 39      |          |  |                | 13              |  |  |      | 12 |  |      |   | 83  |      |  |   | 78   |   |  |   | 27 |  |  |   | 25 | 
|Expected return on plan assets                                                       |  |                             | (42 | )              |                           |                 | (40     | )        |  |                |                |  |  |      |   |  |      |   | (86 | )    |  |   | (82  | ) |  |   |   |  |  |   |   | 
|Amortization of actuarial and investment losses                                      |  |                             | 16  |                |                           |                 | 16      |          |  |                | 3               |  |  |      | 4  |  |      |   | 32  |      |  |   | 31   |   |  |   | 7  |  |  |   | 7  | 
|Amortization of unrecognized prior service costs                                     |  |                             | 3   |                |                           |                 | 3       |          |  |                |                |  |  |      |   |  |      |   | 6   |      |  |   | 7    |   |  |   |   |  |  |   |   | 
|                                                                                     |  |                             |     |                |                           |                 |         |          |  |                |                 |  |  |      |    |  |      |   |     |      |  |   |      |  
|Defined benefit pension and post-retirement benefits other than
    pensions expense |  |                             | 29  |                |                           |                 | 27      |          |  |                | 20              |  |  |      | 19 |  |      |   | 55  |      |  |   | 53   |   |  |   | 40 |  |  |   | 37 | 
|Defined contribution pension expense                                                 |  |                             | 1   |                |                           |                 | 1       |          |  |                |                |  |  |      |   |  |      |   | 2   |      |  |   | 2    |   |  |   |   |  |  |   |   | 
|                                                                                     |  |                             |     |                |                           |                 |         |          |  |                |                 |  |  |      |    |  |      |   |     |      |  |   |      |  
|Post-retirement benefits expense                                                     |  | $                           | 30  |                |                           | $               | 28      |          |  | $              | 20              |  |  | $    | 19 |  |      | $ | 57  |      |  | $ | 55   |   |  | $ | 40 |  |  | $ | 37 | 
|                                                                                     |  |                             |     |                |                           |                 |         |          |  |                |                 |  |  |      |    |  |      |   |     |      |  |   |      |  



|        |                            
|------- | ---------------------------
|Note 7. | Asset Retirement Obligation



|                                  |  |        |     | 
|--------------------------------- |  | ------ | --- | 
|                                  |  | Amount |    
|                                  |  |        |    
|December 31, 2004.                |  | $      | 171 | 
|Accretion expense                 |  |        | 4   | 
|Revisions in estimated cash flows |  |        | 4   | 
|                                  |  |        |    
|June 30, 2005.                    |  | $      | 179 | 
|                                  |  |        |    



|        |                                            
|------- | -------------------------------------------
|Note 8. | Common Shares and Earnings per Common Share



|                                                                                        |  |           |             |  |        |   |       | 
|--------------------------------------------------------------------------------------- |  | --------- | ----------- |  | ------ | - | ----- | 
|                                                                                        |  | Number of |             |  |       
|                                                                                        |  | Shares    |             |  | Amount |  
|                                                                                        |  |           |             |  |        |  
|December 31, 2004.                                                                      |  |           | 188,133,439 |  |        | $ | 2,891 | 
|Options exercised                                                                       |  |           | 914,094     |  |        |   | 23    | 
|Warrants exercised                                                                      |  |           | 3,586       |  |        |   |      | 
|Shares issued under incentive plan                                                      |  |           | 61,698      |  |        |   | 2     | 
|Transfer from contributed surplus in respect of options exercised                       |  |           |            |  |        |   | 2     | 
|Transfer from accrued liabilities in respect of stock
    appreciation rights exercised |  |           |            |  |        |   | 2     | 
|                                                                                        |  |           |             |  |        |  
|June 30, 2005.                                                                          |  |           | 189,112,817 |  |        | $ | 2,920 | 
|                                                                                        |  |           |             |  |        |  

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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |         |       | 
|--------------------------------------------- | -------------------------------------------------------------------------------- | ------------------ | ---- | ---------- | ---------------- | - | ----- | ------- | ---------- | - | ---- | ------- | ------ | - | ---- | ------- | ----- | 
|                                              |                                                                                  | Three Months Ended |      |            | Six Months Ended |  
|                                              |                                                                                  | June 30,           |      |            | June 30,         |  
|                                              |                                                                                  |                    |      |            |                  |  
|                                              |                                                                                  | 2005               |      |            | 2004             |   |       | 2005    |            |   | 2004 |        
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|                                              |                                                                                  |                    |      | (Restated) |                  |   |       |         | (Restated) |  
|Basic earnings (loss) per share computation   |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |        
|Numerator:                                    |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |        
|                                              | Net earnings (loss) applicable to common shares                                  |                    | $    | 215        |                  |   | $     | (14     | )          |   | $    | 528     |        |   | $    | 240     |      
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|Denominator:                                  |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |        
|                                              | Weighted-average common shares outstanding (in thousands)                        |                    |      | 189,023    |                  |   |       | 187,472 |            |   |      | 188,710 |        |   |      | 187,347 |      
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|Basic earnings (loss) per common share        |                                                                                  | $                  | 1.14 |            |                  | $ | (0.07 | )       |            | $ | 2.80 |         |        | $ | 1.28 |        
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|Diluted earnings (loss) per share computation |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |        
|Numerator:                                    |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |        
|                                              | Net earnings (loss) applicable to common shares                                  |                    | $    | 215        |                  |   | $     | (14     | )          |   | $    | 528     |        |   | $    | 240     |      
|                                              | Dilutive effect of:                                                              |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |         |      
|                                              |                                                                                  | Convertible debt   |      |            | 4                |   |       |         |           |   |      |         | 8      |   |      |         | 2     | 
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|                                              | Net earnings (loss) applicable to common shares, assuming
    dilution           |                    | $    | 219        |                  |   | $     | (14     | )          |   | $    | 536     |        |   | $    | 242     |      
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|Denominator:                                  |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |        
|                                              | Weighted-average common shares outstanding (in thousands)                        |                    |      | 189,023    |                  |   |       | 187,472 |            |   |      | 188,710 |        |   |      | 187,347 |      
|                                              | Dilutive effect of:                                                              |                    |      |            |                  |   |       |         |            |   |      |         |        |   |      |         |      
|                                              |                                                                                  | Convertible debt   |      |            | 29,078           |   |       |         |           |   |      |         | 29,078 |   |      |         | 8,731 | 
|                                              |                                                                                  | Stock options      |      |            | 895              |   |       |         |           |   |      |         | 782    |   |      |         | 1,357 | 
|                                              |                                                                                  | Warrants           |      |            | 4,025            |   |       |         |           |   |      |         | 3,908  |   |      |         | 3,836 | 
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|                                              | Weighted-average common shares outstanding, assuming dilution
    (in thousands) |                    |      | 223,021    |                  |   |       | 187,472 |            |   |      | 222,478 |        |   |      | 201,271 |      
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        
|Diluted earnings (loss) per common share      |                                                                                  | $                  | 0.98 |            |                  | $ | (0.07 | )       |            | $ | 2.41 |         |        | $ | 1.20 |        
|                                              |                                                                                  |                    |      |            |                  |   |       |         |            |   |      |        



|        |               
|------- | --------------
|Note 9. | Long-term debt

2 3


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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)










|         |                 
|-------- | ----------------
|Note 10. | Convertible Debt



|                                          |  |       |     |  |             |              |     |             |  |   |       |  |  |   |     | 
|----------------------------------------- |  | ----- | --- |  | ----------- | ------------ | --- | ----------- |  | - | ----- |  |  | - | --- | 
|                                          |  |       |     |  |             | Subordinated |     |             | 
|                                          |  | LYON  |     |  | Convertible |              |     | Convertible |  |   |      
|                                          |  | Notes |     |  | Debentures  |              |     | Debentures  |  |   | Total | 
|                                          |  |       |     |  |             |              |     |             |  |   |       | 
|Long-term debt, including current portion |  | $     | 114 |  |             | $            | 111 |             |  | $ | 106   |  |  | $ | 331 | 
|Equity                                    |  |       | 148 |  |             |              | 148 |             |  |   | 122   |  |  |   | 418 | 
|                                          |  |       |     |  |             |              |     |             |  |   |       | 
|Total                                     |  | $     | 262 |  |             | $            | 259 |             |  | $ | 228   |  |  | $ | 749 | 
|                                          |  |       |     |  |             |              |     |             |  |   |       | 

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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)


Note 11. Warrants




|                   |  |           |            |   |        |   |    | 
|------------------ |  | --------- | ---------- | - | ------ | - | -- | 
|                   |  | Number of |            |   |       
|                   |  | Warrants  |            |   | Amount |  
|                   |  |           |            |   |        |  
|December 31, 2004. |  |           | 11,022,758 |   |        | $ | 62 | 
|Warrants issued    |  |           | 111        |   |        |   |   | 
|Warrants exercised |  |           | (3,586     | ) |        |   |   | 
|                   |  |           |            |   |        |  
|June 30, 2005.     |  |           | 11,019,283 |   |        | $ | 62 | 
|                   |  |           |            |   |        |  



|         |                              
|-------- | -----------------------------
|Note 12. | Commitments and Contingencies



|    |            
|--- | -----------
|(a) | Commitments



|                        |  |                 |     |  |      |   |     |      |  |   |      |  |  |      |     |  |            |   |    |  |  |   |     | 
|----------------------- |  | --------------- | --- |  | ---- | - | --- | ---- |  | - | ---- |  |  | ---- | --- |  | ---------- | - | -- |  |  | - | --- | 
|                        |  | Payments Due in |    
|                        |  |                 |    
|                        |  | 2005            |     |  | 2006 |   |     | 2007 |  |   | 2008 |  |  | 2009 |     |  | Thereafter |  
|                        |  |                 |     |  |      |   |     |      |  |   |      |  |  |      |     |  |            |  
|Purchase obligations(1) |  | $               | 588 |  |      | $ | 354 |      |  | $ | 139  |  |  | $    | 103 |  |            | $ | 92 |  |  | $ | 29  | 
|Operating leases        |  |                 | 19  |  |      |   | 29  |      |  |   | 19   |  |  |      | 8   |  |            |   | 3  |  |  |   | 7   | 
|Other                   |  |                 |    |  |      |   | 2   |      |  |   | 3    |  |  |      | 3   |  |            |   | 3  |  |  |   | 86  | 
|                        |  |                 |     |  |      |   |     |      |  |   |      |  |  |      |     |  |            |  
|Total                   |  | $               | 607 |  |      | $ | 385 |      |  | $ | 161  |  |  | $    | 114 |  |            | $ | 98 |  |  | $ | 122 | 
|                        |  |                 |     |  |      |   |     |      |  |   |      |  |  |      |     |  |            |  






|    |                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These purchase obligations largely relate to the Voiseys
    Bay and Goro projects with the balance comprising routine orders
    to purchase goods and services at current operating locations
    and currently estimated purchases of certain intermediate
    products.



|    |              
|--- | -------------
|(b) | Contingencies





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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|         |                    
|-------- | -------------------
|Note 13. | Segment Information





|                                                                                    |  |          |       |   |               |  |             |          |  |  |              |            |  |       |     |  |      |  |   |      |            |  |      |   |  |      |      |   |      |  |      |   |  |  |       |  |  |  |       | 
|----------------------------------------------------------------------------------- |  | -------- | ----- | - | ------------- |  | ----------- | -------- |  |  | ------------ | ---------- |  | ----- | --- |  | ---- |  | - | ---- | ---------- |  | ---- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ----- |  |  |  | ----- | 
|                                                                                    |  | Finished |       |   |               |  | Development |          |  |  |              |           
|                                                                                    |  | Products |       |   | Intermediates |  |             | Projects |  |  | Eliminations |            |  | Total |    
|                                                                                    |  |          |       |   |               |  |             |          |  |  |              |            |  |       |    
|Six Months Ended June 30,                                                           |  | 2005     |       |   | 2004          |  |             | 2005     |  |  | 2004         |            |  | 2005  |     |  | 2004 |  |   | 2005 |            |  | 2004 |   |  | 2005 |      |   | 2004 | 
|                                                                                    |  |          |       |   |               |  |             |          |  |  |              |            |  |       |     |  |      |  |   |      |            |  |      |   |  |      |      |   |      | 
|                                                                                    |  |          |       |   |               |  |             |          |  |  |              | (Restated) |  |       |     |  |      |  |   |      | (Restated) | 
|Net sales to customers                                                              |  |          | 2,237 |   |               |  | 2,012       |          |  |  | 78           |            |  |       | 74  |  |      |  |  |      |            |  |     |   |  |      |     |   |      |  |     |   |  |  | 2,315 |  |  |  | 2,086 | 
|Intersegment sales                                                                  |  |          |      |   |               |  |            |          |  |  | 356          |            |  |       | 295 |  |      |  |  |      |            |  |     |   |  |      | (356 | ) |      |  | (295 | ) |  |  |      |  |  |  |      | 
|                                                                                    |  |          |       |   |               |  |             |          |  |  |              |            |  |       |     |  |      |  |   |      |            |  |      |   |  |      |      |   |      | 
|Net sales                                                                           |  |          | 2,237 |   |               |  | 2,012       |          |  |  | 434          |            |  |       | 369 |  |      |  |  |      |            |  |     |   |  |      | (356 | ) |      |  | (295 | ) |  |  | 2,315 |  |  |  | 2,086 | 
|                                                                                    |  |          |       |   |               |  |             |          |  |  |              |            |  |       |     |  |      |  |   |      |            |  |      |   |  |      |      |   |      | 
|Earnings (loss) before income and mining taxes and minority
    interest by segment |  |          | 689   |   |               |  | 580         |          |  |  | 228          |            |  |       | 210 |  |      |  |  |      |            |  | (208 | ) |  |      | (30  | ) |      |  | (5   | ) |  |  | 887   |  |  |  | 577   | 
|                                                                                    |  |          |       |   |               |  |             |          |  |  |              |            |  |       |     |  |      |  |   |      |            |  |      |   |  |      |      |   |      | 
|Expenses (income) not specifically
    allocable to segments:                       |  |          |       |   |               |  |             |         
|Corporate selling, general and
    administrative expenses                          |  |          | 67    |   |               |  | 48          |         
|Currency translation adjustments                                                    |  |          | (4    | ) |               |  | (33         | )       
|Interest expense                                                                    |  |          | 12    |   |               |  | 20          |         
|Other income, net                                                                   |  |          | (3    | ) |               |  | (15         | )       
|                                                                                    |  |          |       |   |               | 
|Earnings before income and mining
    taxes and minority interest                   |  |          | 815   |   |               |  | 557         |         
|                                                                                    |  |          |       |   |               | 

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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)


|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |       |  |      |  |       |      |            |  |       |   |  |      |      |   |      |  |      |   |  |  |       |  |  |  |       | 
|----------------------------------------------------------------------------------- |  | -------- | ------ | - | ------------- |  | ----------- | -------- |  |  | ------------ | ---------- |  | ----- | ----- |  | ---- |  | ----- | ---- | ---------- |  | ----- | - |  | ---- | ---- | - | ---- |  | ---- | - |  |  | ----- |  |  |  | ----- | 
|                                                                                    |  | Finished |        |   |               |  | Development |          |  |  |              |           
|                                                                                    |  | Products |        |   | Intermediates |  |             | Projects |  |  | Eliminations |            |  | Total |      
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |      
|Three Months Ended June 30,                                                         |  | 2005     |        |   | 2004          |  |             | 2005     |  |  | 2004         |            |  | 2005  |       |  | 2004 |  |       | 2005 |            |  | 2004  |   |  | 2005 |      |   | 2004 | 
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |       |  |      |  |       |      |            |  |       |   |  |      |      |   |      | 
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              | (Restated) |  |       |       |  |      |  |       |      | (Restated) | 
|Net sales to customers                                                              |  |          | 1,150  |   |               |  | 956         |          |  |  | 44           |            |  |       | 36    |  |      |  |      |      |            |  |      |   |  |      |     |   |      |  |     |   |  |  | 1,194 |  |  |  | 992   | 
|Intersegment sales                                                                  |  |          |       |   |               |  |            |          |  |  | 219          |            |  |       | 141   |  |      |  |      |      |            |  |      |   |  |      | (219 | ) |      |  | (141 | ) |  |  |      |  |  |  |      | 
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |       |  |      |  |       |      |            |  |       |   |  |      |      |   |      | 
|Net sales                                                                           |  |          | 1,150  |   |               |  | 956         |          |  |  | 263          |            |  |       | 177   |  |      |  |      |      |            |  |      |   |  |      | (219 | ) |      |  | (141 | ) |  |  | 1,194 |  |  |  | 992   | 
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |       |  |      |  |       |      |            |  |       |   |  |      |      |   |      | 
|Earnings (loss) before income and mining taxes and minority
    interest by segment |  |          | 341    |   |               |  | 212         |          |  |  | 143          |            |  |       | 92    |  |      |  |      |      |            |  | (204  | ) |  |      | (27  | ) |      |  | 20   |   |  |  | 457   |  |  |  | 120   | 
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |       |  |      |  |       |      |            |  |       |   |  |      |      |   |      | 
|Expenses (income) not specifically
    allocable to segments:                       |  |          |        |   |               |  |             |         
|Corporate selling, general and
    administrative expenses                          |  |          | 35     |   |               |  | 28          |         
|Currency translation adjustments                                                    |  |          | 1      |   |               |  | (18         | )       
|Interest expense                                                                    |  |          | 5      |   |               |  | 9           |         
|Other income, net                                                                   |  |          | (2     | ) |               |  | (10         | )       
|                                                                                    |  |          |        |   |               | 
|Earnings before income and mining
    taxes and minority interest                   |  |          | 418    |   |               |  | 111         |         
|                                                                                    |  |          |        |   |               | 
|Identifiable assets at June 30, 2005 and December 31,
    2004                      |  |          | 2,873  |   |               |  | 2,793       |          |  |  | 1,512        |            |  |       | 1,580 |  |      |  | 5,690 |      |            |  | 5,394 |   |  |      | (84  | ) |      |  | (54  | ) |  |  | 9,991 |  |  |  | 9,713 | 
|                                                                                    |  |          |        |   |               |  |             |          |  |  |              |            |  |       |       |  |      |  |       |      |            |  |       |   |  |      |      |   |      | 
|Other assets                                                                        |  |          | 1,300  |   |               |  | 1,024       |         
|                                                                                    |  |          |        |   |               | 
|Total assets at June 30, 2005 and December 31, 2004                                 |  |          | 11,291 |   |               |  | 10,737      |         
|                                                                                    |  |          |        |   |               | 



|         |                         
|-------- | ------------------------
|Note 14. | Supplemental Information



|                          |  |          |       |  |              |   |       | 
|------------------------- |  | -------- | ----- |  | ------------ | - | ----- | 
|                          |  | June 30, |       |  | December 31, |  
|                          |  | 2005     |       |  | 2004         |  
|                          |  |          |       |  |              |  
|Cash                      |  | $        | 288   |  |              | $ | 240   | 
|Cash equivalents          |  |          | 885   |  |              |   | 836   | 
|                          |  |          |       |  |              |  
|Cash and cash equivalents |  | $        | 1,173 |  |              | $ | 1,076 | 
|                          |  |          |       |  |              |  
|Finished metals           |  | $        | 213   |  |              | $ | 228   | 
|In-process metals         |  |          | 595   |  |              |   | 511   | 
|Supplies                  |  |          | 93    |  |              |   | 95    | 
|                          |  |          |       |  |              |  
|Inventories               |  | $        | 901   |  |              | $ | 834   | 
|                          |  |          |       |  |              |  

|                                       |  |   |        |            |  |   |        | 
|-------------------------------------- |  | - | ------ | ---------- |  | - | ------ | 
|                                       |  |   |        | (Restated) | 
|                                       |  |   |        |            | 
|Property, plant and equipment, at cost |  | $ | 12,611 |            |  | $ | 12,227 | 
|Accumulated depreciation and depletion |  |   | 4,694  |            |  |   | 4,640  | 
|                                       |  |   |        |            |  |  
|Property, plant and equipment, net     |  | $ | 7,917  |            |  | $ | 7,587  | 
|                                       |  |   |        |            |  |  

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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|         |                         
|-------- | ------------------------
|Note 15. | Stock Compensation Plans



|                                                                 |  |      |       |   |      |   |       |  
|---------------------------------------------------------------- |  | ---- | ----- | - | ---- | - | ----- | -
|                                                                 |  | 2005 |       |   | 2004 |  
|                                                                 |  |      |       |   |      |  
|Stock price at grant date                                        |  | $    | 39.67 |   |      | $ | 36.40 |  
|Exercise price                                                   |  | $    | 39.67 |   |      | $ | 36.40 |  
|Weighted-average fair value of options granted during the period |  | $    | 12.21 |   |      | $ | 10.37 |  
|Expected life of options (years)                                 |  |      | 3.6   |   |      |   | 3.4   |  
|Expected dividend yield                                          |  |      |      | % |      |   |      | %
|Expected stock price volatility                                  |  |      | 34.8  | % |      |   | 35.0  | %
|Risk-free interest rate                                          |  |      | 3.6   | % |      |   | 2.5   | %



|         |                                                            
|-------- | -----------------------------------------------------------
|Note 16. | Sale of Interests in Goro Nickel S.A.S. (Goro
    Nickel)





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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)










|         |                                                                    
|-------- | -------------------------------------------------------------------
|Note 17. | Significant Differences Between Canadian and United States
    GAAP



16



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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|                                                                                                                 |                                                                                    |      |     |            |      |   |     |      |  
|---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ---- | --- | ---------- | ---- | - | --- | ---- | -
|Six Months Ended June 30,                                                                                        |                                                                                    | 2005 |     |            | 2004 |  
|                                                                                                                 |                                                                                    |      |     |            |      |  
|                                                                                                                 |                                                                                    |      |     | (Restated) |     
|Net earnings  Canadian GAAP                                                                                     |                                                                                    | $    | 528 |            |      | $ | 240 |     
|Increased post-retirement benefits expense (a)                                                                   |                                                                                    |      | (23 | )          |      |   | (19 | )   
|Increased research and development expense (b)                                                                   |                                                                                    |      | (13 | )          |      |   | (5  | )   
|Increased exploration expense (c)                                                                                |                                                                                    |      | (1  | )          |      |   | (1  | )   
|Increased interest expense (d)                                                                                   |                                                                                    |      | (11 | )          |      |   | (6  | )   
|Unrealized net gain (loss) on derivative instruments (e)                                                         |                                                                                    |      | (13 | )          |      |   | 6   |     
|Unrealized currency translation gains on Voiseys Bay
    project deferred income and mining tax liabilities (f) |                                                                                    |      | 22  |            |      |   | 40  |     
|Asset impairment charge (g)                                                                                      |                                                                                    |      |    |            |      |   | 11  |     
|Decreased (increased) minority interest expense                                                                  |                                                                                    |      | 8   |            |      |   | (7  | )   
|Taxes on United States GAAP differences                                                                          |                                                                                    |      | (1  | )          |      |   |    |     
|                                                                                                                 |                                                                                    |      |     |            |      |  
|Net earnings  United States GAAP                                                                                |                                                                                    |      | 496 |            |      |   | 259 |     
|                                                                                                                 |                                                                                    |      |     |            |      |  
|Other comprehensive income (loss) (i):                                                                           |                                                                                    |      |     |            |      |   |     |     
|                                                                                                                 | Reclassification of net gain on derivatives designated as cash
    flow hedges (e) |      |     | (8         | )    |   |     | (13  | )
|                                                                                                                 | Reclassification of net gain on derivatives due to
    ineffectiveness (e)         |      |     |           |      |   |     | (9   | )
|                                                                                                                 | Change in fair value of derivatives designated as cash flow
    hedges (e)         |      |     | (6         | )    |   |     | 6    |  
|Unrealized gain (loss) on long-term investments (h)                                                              |                                                                                    |      | 2   |            |      |   | (6  | )   
|Taxes on other comprehensive loss                                                                                |                                                                                    |      | 4   |            |      |   | 2   |     
|                                                                                                                 |                                                                                    |      |     |            |      |  
|Other comprehensive income (loss) (i)                                                                            |                                                                                    |      | (8  | )          |      |   | (20 | )   
|                                                                                                                 |                                                                                    |      |     |            |      |  
|Comprehensive earnings (i)                                                                                       |                                                                                    | $    | 488 |            |      | $ | 239 |     
|                                                                                                                 |                                                                                    |      |     |            |      |  
|                                                                                                                 | Net earnings per share  Basic                                                     |      | $   | 2.63       |      |   | $   | 1.38 |  
|                                                                                                                 |                                                                                    |      |     |            |      |  
|                                                                                                                 | Net earnings per share  Diluted                                                   |      | $   | 2.26       |      |   | $   | 1.25 |  
|                                                                                                                 |                                                                                    |      |     |            |      |  



|    |                         
|--- | ------------------------
|(a) | Post-retirement Benefits







|    |                                 
|--- | --------------------------------
|(b) | Research and Development Expense



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INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)






|    |                    
|--- | -------------------
|(c) | Exploration Expense





|    |                 
|--- | ----------------
|(d) | Convertible Debt





|    |                           
|--- | --------------------------
|(e) | Accounting for Derivatives





|    |                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------
|(f) | Unrealized Currency Translation Gains (Losses) on
    Voiseys Bay Project Deferred Income and Mining Tax
    Liabilities





|    |                        
|--- | -----------------------
|(g) | Asset Impairment Charge





|    |            
|--- | -----------
|(h) | Investments



18



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##### Table of Contents



INCO LIMITED AND SUBSIDIARIES


Notes to Consolidated Financial
Statements  (Continued)




|    |                     
|--- | --------------------
|(i) | Comprehensive Income





|    |                   
|--- | ------------------
|(j) | Earnings Per Share





|    |                         
|--- | ------------------------
|(k) | Supplemental Information



|                                                            |  |      |      |            |      |   |        |  
|----------------------------------------------------------- |  | ---- | ---- | ---------- | ---- | - | ------ | -
|Six Months Ended June 30,                                   |  | 2005 |      |            | 2004 |  
|                                                            |  |      |      |            |      |  
|                                                            |  |      |      | (Restated) |     
|Deficit at beginning of period                              |  | $    | (665 | )          |      | $ | (1,144 | )
|Net earnings                                                |  |      | 496  |            |      |   | 259    |  
|Common dividends paid                                       |  |      | (19  | )          |      |   |       |  
|                                                            |  |      |      |            |      |  
|Deficit at end of period                                    |  | $    | (188 | )          |      | $ | (885   | )
|                                                            |  |      |      |            |      |  
|Accumulated other comprehensive loss at beginning of period |  | $    | (589 | )          |      | $ | (516   | )
|Other comprehensive loss                                    |  |      | (8   | )          |      |   | (20    | )
|                                                            |  |      |      |            |      |  
|Accumulated other comprehensive loss at end of period       |  | $    | (597 | )          |      | $ | (536   | )
|                                                            |  |      |      |            |      |  



|    |                                 
|--- | --------------------------------
|(l) | Recent Accounting Pronouncements

Share-Based
Payment


Accounting for Changes and Error Corrections


19



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##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

Overview






| |                       
| | ----------------------
| | Nature of Our Business





20



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##### Table of Contents





| |                                   
| | ----------------------------------
| | Key Factors Affecting Our Business







| |                                  
| | ---------------------------------
| | Recent Nickel Market Developments





21



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##### Table of Contents



Results of Operations




| |                 
| | ----------------
| | Earnings Summary



|                                      |           |                    |       |            |                  |   |     |       |            |   |       |      |  |   |       |      | 
|------------------------------------- | --------- | ------------------ | ----- | ---------- | ---------------- | - | --- | ----- | ---------- | - | ----- | ---- |  | - | ----- | ---- | 
|                                      |           | Three Months Ended |       |            | Six Months Ended |  
|                                      |           | June 30,           |       |            | June 30,         |  
|                                      |           |                    |       |            |                  |  
|                                      |           | 2005               |       |            | 2004             |   |     | 2005  |            |   | 2004  |     
|                                      |           |                    |       |            |                  |   |     |       |            |   |       |     
|                                      |           |                    |       | (Restated) |                  |   |     |       | (Restated) |  
|Net sales                             |           | $                  | 1,194 |            |                  | $ | 992 |       |            | $ | 2,315 |      |  | $ | 2,086 |     
|Net earnings (loss)                   |           |                    | 215   |            |                  |   | (14 | )     |            |   | 528   |      |  |   | 240   |     
|Net earnings (loss) per common share  |           |                    |       |            |                  |   |     |       |            |   |       |      |  |   |       |     
|                                      |  basic   |                    |       | 1.14       |                  |   |     | (0.07 | )          |   |       | 2.80 |  |   |       | 1.28 | 
|                                      |  diluted |                    |       | 0.98       |                  |   |     | (0.07 | )          |   |       | 2.41 |  |   |       | 1.20 | 
|Cash provided by operating activities |           |                    | 422   |            |                  |   | 339 |       |            |   | 513   |      |  |   | 719   |     





Principal factors affecting 2005 second quarter net
earnings in comparison with 2004 second quarter net loss




| |                       
| | ----------------------
| | In millions of dollars




22



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##### Table of Contents



Principal factors affecting 2005 first six months net
earnings in comparison with 2004 first six months net
earnings




| |                       
| | ----------------------
| | In millions of dollars






| |          
| | ---------
| | Net Sales





|                |  |              |       |  |                  |   |     |      |  |   |       |  |  |   |       | 
|--------------- |  | ------------ | ----- |  | ---------------- | - | --- | ---- |  | - | ----- |  |  | - | ----- | 
|                |  | Three Months |       |  |                 
|                |  | Ended        |       |  | Six Months Ended |  
|                |  | June 30,     |       |  | June 30,         |  
|                |  |              |       |  |                  |  
|                |  | 2005         |       |  | 2004             |   |     | 2005 |  |   | 2004  | 
|                |  |              |       |  |                  |   |     |      |  |   |       | 
|Primary nickel  |  | $            | 1,017 |  |                  | $ | 788 |      |  | $ | 1,911 |  |  | $ | 1,680 | 
|Copper          |  |              | 91    |  |                  |   | 85  |      |  |   | 201   |  |  |   | 168   | 
|Precious metals |  |              | 75    |  |                  |   | 46  |      |  |   | 144   |  |  |   | 126   | 
|Other           |  |              | 11    |  |                  |   | 73  |      |  |   | 59    |  |  |   | 112   | 
|                |  |              |       |  |                  |   |     |      |  |   |       | 
|                |  | $            | 1,194 |  |                  | $ | 992 |      |  | $ | 2,315 |  |  | $ | 2,086 | 
|                |  |              |       |  |                  |   |     |      |  |   |       | 

23



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##### Table of Contents





Average realized and LME cash prices for nickel and copper




| |                     
| | --------------------
| | In dollars per pound

Second Quarter





First Six Months







Deliveries




| |                                        
| | ---------------------------------------
| | Nickel and copper in millions of pounds

| |                                 
| | --------------------------------
| | PGMs in thousands of troy ounces

Second Quarter





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##### Table of Contents



First Six Months







| |                                 
| | --------------------------------
| | Cost of Sales and Other Expenses



|                                                         |             |                    |        |       |                  |  |        |       |  |  |         |       |  |  |         |       | 
|-------------------------------------------------------- | ----------- | ------------------ | ------ | ----- | ---------------- |  | ------ | ----- |  |  | ------- | ----- |  |  | ------- | ----- | 
|                                                         |             | Three Months Ended |        |       | Six Months Ended | 
|                                                         |             | June 30,           |        |       | June 30,         | 
|                                                         |             |                    |        |       |                  | 
|                                                         |             | 2005               |        |       | 2004             |  |        | 2005  |  |  | 2004    |      
|                                                         |             |                    |        |       |                  |  |        |       |  |  |         |      
|Production  Nickel in all forms (tonnes)                |             |                    | 50,353 |       |                  |  | 59,586 |       |  |  | 105,860 |       |  |  | 117,257 |      
|Nickel unit cash cost of sales before by-product credits |             |                    |        |       |                  |  |        |       |  |  |         |       |  |  |         |      
|                                                         |  per tonne |                    | $      | 6,856 |                  |  | $      | 5,600 |  |  | $       | 6,614 |  |  | $       | 5,468 | 
|                                                         |  per pound |                    |        | 3.11  |                  |  |        | 2.54  |  |  |         | 3.00  |  |  |         | 2.48  | 
|Nickel unit cash cost of sales after by-product credits  |             |                    |        |       |                  |  |        |       |  |  |         |       |  |  |         |      
|                                                         |  per tonne |                    | $      | 6,195 |                  |  | $      | 5,203 |  |  | $       | 5,908 |  |  | $       | 4,828 | 
|                                                         |  per pound |                    |        | 2.81  |                  |  |        | 2.36  |  |  |         | 2.68  |  |  |         | 2.19  | 
|Finished nickel inventories at end of period (tonnes)    |             |                    | 23,053 |       |                  |  | 29,080 |       |  |  | 23,053  |       |  |  | 29,080  |      











25



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##### Table of Contents











Factors Affecting Nickel Unit Cash Cost of Sales After
By-product Credits




Nickel Unit Cash Cost of Sales after by-product credits




| |                              
| | -----------------------------
| | In dollars or cents per pound

Second Quarter 2005 compared with Second Quarter 2004





26



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##### Table of Contents



First Six Months 2005 compared with First Six Months 2004







| |                                    
| | -----------------------------------
| | Selling, General and Administrative





| |                        
| | -----------------------
| | Asset Impairment Charge





| |                        
| | -----------------------
| | Income and Mining Taxes





| |                  
| | -----------------
| | Minority Interest





| |                      
| | ---------------------
| | Intermediates Segment



27



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##### Table of Contents





Cash Flows, Liquidity and Capital Resources












28



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##### Table of Contents









29



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##### Table of Contents





Update on Protected Forests Legislation in Indonesia






Critical Accounting Policies and Estimates




Accounting Changes




| |                 
| | ----------------
| | Convertible Debt

Financial
Instruments  Disclosure and Presentation 1 2 Financial Instruments that may be Settled at the
Issuers Option in Cash or its own Equity Instruments


Non-GAAP Financial Measure




30



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##### Table of Contents







Reconciliation of Nickel Unit Cash Cost of Sales Before and
After By-Product Credits to Canadian GAAP Cost of Sales


|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |   |  |   |       |  
|-------------------------------------------------------------------------- |  | ------------------ | ---- | - | ---------------- | - | ---- | ---- |  | - | ----- | - |  | - | ----- | -
|                                                                           |  | Three Months Ended |      |   | Six Months Ended |  
|                                                                           |  | June 30,           |      |   | June 30,         |  
|                                                                           |  |                    |      |   |                  |  
|                                                                           |  | 2005               |      |   | 2004             |   |      | 2005 |  |   | 2004  |  
|(In millions of United States dollars except pound and per pound data)     |  |                    |      |   |                  |   |      |      |  |   |       |  
|Cost of sales and other expenses, excluding depreciation
    and depletion |  | $                  | 616  |   |                  | $ | 580  |      |  | $ | 1,219 |   |  | $ | 1,137 |  
|By-product costs                                                           |  |                    | (151 | ) |                  |   | (138 | )    |  |   | (315  | ) |  |   | (277  | )
|Purchased finished nickel                                                  |  |                    | (87  | ) |                  |   | (43  | )    |  |   | (156  | ) |  |   | (133  | )
|Delivery expense                                                           |  |                    | (9   | ) |                  |   | (8   | )    |  |   | (18   | ) |  |   | (16   | )
|Other businesses cost of sales                                             |  |                    | (9   | ) |                  |   | (9   | )    |  |   | (19   | ) |  |   | (20   | )
|Non-cash items (1)                                                         |  |                    | (7   | ) |                  |   | (9   | )    |  |   | (14   | ) |  |   | (18   | )
|Remediation, demolition and other related expenses                         |  |                    | (9   | ) |                  |   | (6   | )    |  |   | (16   | ) |  |   | (11   | )
|Adjustments associated with affiliate transactions                         |  |                    | 37   |   |                  |   | (35  | )    |  |   | 46    |   |  |   | (41   | )
|Other                                                                      |  |                    | 1    |   |                  |   |     |      |  |   | (1    | ) |  |   | 1     |  
|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |  
|Nickel cash cost of sales before by-product credits (2)                    |  |                    | 382  |   |                  |   | 332  |      |  |   | 726   |   |  |   | 622   |  
|By-product net sales                                                       |  |                    | (187 | ) |                  |   | (161 | )    |  |   | (393  | ) |  |   | (350  | )
|By-product costs                                                           |  |                    | 151  |   |                  |   | 138  |      |  |   | 315   |   |  |   | 277   |  
|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |  
|Nickel cash cost of sales after by-product credits (2)                     |  | $                  | 346  |   |                  | $ | 309  |      |  | $ | 648   |   |  | $ | 549   |  
|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |  
|Inco-source nickel deliveries (millions of pounds)                         |  |                    | 123  |   |                  |   | 131  |      |  |   | 242   |   |  |   | 251   |  
|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |  
|Nickel unit cash cost of sales before by-product credits
    per pound     |  | $                  | 3.11 |   |                  | $ | 2.54 |      |  | $ | 3.00  |   |  | $ | 2.48  |  
|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |  
|Nickel unit cash cost of sales after by-product credits
    per pound      |  | $                  | 2.81 |   |                  | $ | 2.36 |      |  | $ | 2.68  |   |  | $ | 2.19  |  
|                                                                           |  |                    |      |   |                  |   |      |      |  |   |       |  






|    |                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------
|(1) | Representing principally post-retirement benefits other than
    pensions.                                              
|   
|(2) | Nickel cash cost of sales before and after by-product credits
    includes costs for both Inco-source and external feed.

31



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|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market
    Risk



| |            
| | -----------
| | Other Risks











32



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|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures





| |                                                           
| | ----------------------------------------------------------
| | Cautionary Notice Regarding Forward-Looking
    Statements



33



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##### Table of Contents






PART II  OTHER INFORMATION







|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders







| |                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) electing all eleven Directors for a one-year term
    expiring in 2006 (one Director, James M. Stanford, had
    indicated, as noted in our Proxy Circular and Statement, that he
    planned to retire from the Companys Board of Directors in
    late July 2005);
|
| | (2) appointing the Auditors of the Company;                                                                                                                                                                                                                              
|
| | (3) approving a resolution reconfirming the Companys
    Shareholder Rights Plan, as it was proposed to be amended; and                                                                                                                                                 
|
| | (4) approving the Companys new 2005 Key Employees
    Incentive Plan.                                                                                                                                                                                                   

Election of Directors.


|                  |  |           |             |  |   |              |       |                |  |  |           |  |  |  |      | 
|----------------- |  | --------- | ----------- |  | - | ------------ | ----- | -------------- |  |  | --------- |  |  |  | ---- | 
|                  |  |           |             |  |   | Number of    |       |                | 
|                  |  |           |             |  |   | Abstentions/ |       |                | 
|Name of Nominee   |  | Votes for |             |  | % |              |       | Withheld Votes |  |  | %         | 
|                  |  |           |             |  |   |              |       |                |  |  |           | 
|Glen A. Barton    |  |           | 124,238,797 |  |   |              | 99.88 |                |  |  | 143,989   |  |  |  | 0.12 | 
|Angus A. Bruneau  |  |           | 124,362,042 |  |   |              | 99.98 |                |  |  | 20,744    |  |  |  | 0.02 | 
|Ronald C. Cambre  |  |           | 124,204,355 |  |   |              | 99.86 |                |  |  | 179,431   |  |  |  | 0.14 | 
|Scott M. Hand     |  |           | 123,887,029 |  |   |              | 99.60 |                |  |  | 495,757   |  |  |  | 0.40 | 
|Janice K. Henry   |  |           | 124,214,040 |  |   |              | 99.86 |                |  |  | 168,746   |  |  |  | 0.14 | 
|Chaviva M. Hosek  |  |           | 124,340,034 |  |   |              | 99.96 |                |  |  | 42,752    |  |  |  | 0.04 | 
|Peter C. Jones    |  |           | 124,128,120 |  |   |              | 99.79 |                |  |  | 254,666   |  |  |  | 0.21 | 
|John T. Mayberry  |  |           | 124,336,800 |  |   |              | 99.96 |                |  |  | 45,986    |  |  |  | 0.04 | 
|David P. OBrien  |  |           | 123,963,033 |  |   |              | 99.66 |                |  |  | 419,753   |  |  |  | 0.34 | 
|Roger Phillips    |  |           | 124,191,903 |  |   |              | 99.84 |                |  |  | 190,885   |  |  |  | 0.16 | 
|James M. Stanford |  |           | 122,351,656 |  |   |              | 98.37 |                |  |  | 2,031,130 |  |  |  | 1.63 | 

Appointment of Auditors.


|            |  |   |       |              |                |  |         |   |  |  |      | 
|----------- |  | - | ----- | ------------ | -------------- |  | ------- | - |  |  | ---- | 
|            |  |   |       | Number of    |                |  |        
|            |  |   |       | Abstentions/ |                |  |        
|Votes for   |  | % |       |              | Withheld Votes |  |         | % | 
|            |  |   |       |              |                |  |         |   | 
|124,060,125 |  |   | 99.78 |              |                |  | 271,314 |   |  |  | 0.22 | 

Shareholder Rights Plan Reconfirmation.


34



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##### Table of Contents







|           |  |   |       |              |                |  |            |   |  |  |       | 
|---------- |  | - | ----- | ------------ | -------------- |  | ---------- | - |  |  | ----- | 
|           |  |   |       | Number of    |                |  |           
|           |  |   |       | Abstentions/ |                |  |           
|Votes For  |  | % |       |              | Withheld Votes |  |            | % | 
|           |  |   |       |              |                |  |            |   | 
|75,918,945 |  |   | 67.67 |              |                |  | 36,268,131 |   |  |  | 33.33 | 

Approval of 2005 Key Employees Incentive Plan.




|           |  |   |       |              |                |  |            |   |  |  |       | 
|---------- |  | - | ----- | ------------ | -------------- |  | ---------- | - |  |  | ----- | 
|           |  |   |       | Number of    |                |  |           
|           |  |   |       | Abstentions/ |                |  |           
|Votes For  |  | % |       |              | Withheld Votes |  |            | % | 
|           |  |   |       |              |                |  |            |   | 
|92,688,299 |  |   | 82.67 |              |                |  | 19,423,560 |   |  |  | 17.33 | 






|        |                  
|------- | -----------------
|Item 5. | Other Information








|        |         
|------- | --------
|Item 6. | Exhibits

| |      |  |  |                                                                                                                                                                                                                
| | ---- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1 |  |  | Certification of the Chief Executive Officer of the Registrant
    pursuant to Rule 13a-14(a) of the U.S. Securities
    Exchange Act of 1934, as amended                                                      
| | 31.2 |  |  | Certification of the Chief Financial Officer of the Registrant
    pursuant to Rule 13a-14(a) of the U.S. Securities
    Exchange Act of 1934, as amended                                                      
| | 32.1 |  |  | Certification of the Chief Executive Officer and Chief Financial
    Officer of the Registrant pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002

35



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##### Table of Contents



SIGNATURES




|                     |  |                                                                                                    
|-------------------- |  | ---------------------------------------------------------------------------------------------------
|                    
|                     |  | Inco Limited                                                                                       
|                    
|Date: August 3, 2005 |  | By: /s/ S. F.
    FeinerS.
    F. FeinerExecutive Vice-President,
    General Counsel and Secretary
|                    
|Date: August 3, 2005 |  | By: /s/ R. A.
    LehtovaaraR.
    A. LehtovaaraVice-President and Comptroller                     

36



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##### Table of Contents



EXHIBIT INDEX


|         |      |  |  |                                                                                                                                                                                                                
|-------- | ---- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |      |  | 
|         |      |  | 
|         | 31.1 |  |  | Certification of the Chief Executive Officer of the Registrant
    pursuant to Rule 13a-14(a) of the U.S. Securities
    Exchange Act of 1934, as amended                                                      
|        
|         | 31.2 |  |  | Certification of the Chief Financial Officer of the Registrant
    pursuant to Rule 13a-14(a) of the U.S. Securities
    Exchange Act of 1934, as amended                                                      
|        
|         | 32.1 |  |  | Certification of the Chief Executive Officer and Chief Financial
    Officer of the Registrant pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002