Nickel and palladium producer Inco says that it expects to produce around 405,000 ounces of platinum group metals this year.

The metals giant, which is the world's second biggest nickel firm, revealed the forecast in a statement made by the firm's chief executive officer.

Speaking to Reuters at a materials conference in Montreal, Scott Hand also outlined the plans for developing nickel - the company's primary resource - but stressed the impact that energy prices would have on the metals market in general.

Inco anticipates energy costs will continue to rise next year as the price of oil goes up, with electricity rates in Ontario, Canada, also potentially being hiked by as much as 25 per cent.

One of the company's main operations is in Ontario, located at the Sudbury site.