North American mining firm Inco has issued a surprise earnings warning after production problems at its Sudbury plant saw the firm's platinum group metal (pgm) output stutter.

Inco revealed it took longer than expected to get its Ontario operations back into full production with a series of upgrades dogged by difficulties.

Attempts to recover lost ground as a result of the strike in August have failed to provide the necessary boost.

'We have not had a three-month strike at Ontario in 20 years. We expected to overcome these ramp-up problems earlier, but unfortunately that was not the case,' Inco chairman and chief executive officer Scott Hand explained.

However, president and chief operating officer Peter Jones said labour relations at Inco's Sudbury operations were now 'generally positive'.

Production of pgms in 2003 will drop to about 205,000 to 210,000 troy ounces from a previous forecast of 280,000 ounces, Inco said.