UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~June~~July 2526, 2006

INCO LIMITED

(Exact name of Registrant as specified in its charter)

CANADA	1-1143	98-0000676
(Province or other jurisdiction of	(Commission File Number)	(I.R.S. Employer Identification
(Province or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number (if applicable))
incorporation or organization)		Number (if applicable))

145 King Street West, Suite 1500,
Toronto, Ontario M5H 4B7
(416) 361-7511
(Address and Telephone Number of Registrant’s Principal Executive Offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

þ o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

~~Item~~o Soliciting material pursuant to Rule ~~1.01~~14a-12 ~~Entry~~under ~~into~~the aExchange ~~Material~~Act ~~Definitive~~(17 ~~Agreement~~CFR 240.14a-12)

Ono Pre-commencement ~~June 25,~~communications ~~2006,~~pursuant Inco Limited (“Inco”), together with Falconbridge Limited (“Falconbridge”) and Phelps Dodge Corporation (“Phelps Dodge”), announced that they had entered into a number of agreements, described below, relating to Rule 14d-2(ib) an ~~increase in the consideration~~ under ~~Inco’s outstanding offer to acquire all of~~ the ~~common~~Exchange ~~shares~~Act ~~of Falconbridge and~~ (~~ii) a~~17 ~~proposed~~CFR ~~combination of Inco and Phelps Dodge, pursuant to a statutory plan of arrangement under which Inco would amalgamate with a wholly~~240.14d-~~owned subsidiary of Phelps Dodge and become a wholly-owned~~2(b)) subsidiary of Phelps Dodge. If both Inco’s offer to acquire all the outstanding shares of Falconbridge and the proposed arrangement are successfully completed, the three companies would continue as “Phelps Dodge Inco Corporation”.

~~Fifth~~o Pre-commencement ~~Amendment~~communications pursuant to ~~Support~~Rule 13e-4(c) ~~Agreement~~under ~~between~~the ~~Inco~~Exchange ~~and~~Act ~~Falconbridge~~(17 CFR 240.13e-4(c))

~~On June~~Item 25, 2006, Inco entered into a fifth amending agreement (the “Fifth Amendment”) with Falconbridge for the purpose of amending the support agreement (as amended, the “Support Agreement”) originally entered into by Inco and Falconbridge on October 10, 2005, as subsequently amended on January 12, 2006, February 20, 2006, March 21, 2006 and May 13, 2006, respectively1. ~~Under~~02 Termination ~~the terms~~ of the Fifth Amendment, Inco has agreed to increase the cash consideration and the share consideration offered to holders of Falconbridge common shares pursuant to Inco’s offer (the “Offer”) to acquire all of the issued and outstanding Falconbridge common shares to Cdn.$53.83 in cash and to 0.82419 of an Inco common share, respectively, per Falconbridge common share. As a ~~result,~~ ~~Falconbridge~~Material ~~shareholders~~Definitive ~~will be entitled to elect to receive either Cdn~~Agreement.~~$53.83 in cash~~ for each Falconbridge common share held or 0.82419 of a common share of Inco plus Cdn.$0.05 in cash for each Falconbridge common share held, subject in each case to proration based upon the maximum amount of cash available and the maximum number of Inco common shares issuable under the Offer. The maximum amount of cash consideration available under the Offer has been increased to Cdn.$6,700,377,653 and the maximum number of Inco common shares available for issuance under the Offer has been increased to 213,171,558 Inco common shares. Assuming full proration of these maximum amounts, Falconbridge shareholders would be entitled to receive Cdn.$17.50 in cash and 0.55676 of an Inco common share for each Falconbridge common share tendered to the Offer, subject to adjustment for fractional shares. Inco and Falconbridge have also agreed to a corresponding adjustment to the number of Inco common shares to be received by holders of Falconbridge options following the completion of the take-over bid.

~~The Fifth Amendment also amends the~~ Support Agreement tobetween ~~provide that the Support Agreement may be terminated by either~~ Inco or Falconbridge in the event (i) the other party has not complied in all material respects with its covenants or obligations under the Support Agreement, or (ii) any representation or warranty of the other party under the Support Agreement shall have been untrue or incorrect as at October 10, 2005 (being the first date of the Support Agreement) or shall have become untrue or incorrect at any time prior to the Expiry Time (as defined in the Support Agreement) and such untrue or incorrect representation or warranty is not curable or, if curable, is not cured by the earlier of such date which is 30 days from the notice of such breach and the Expiry Time except, in the case of a termination by Falconbridge~~, for any untrue representations or~~ warranties of Inco which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect (as defined in the Support Agreement) with respect to Inco, or, in the case of a termination by Inco, for any untrue representations or warranties of Falconbridge which, individually or in the aggregate, would not, or would not reasonably be expected to, have a Material Adverse Effect with respect to Falconbridge or would not, or would not reasonably be expected to, prevent or materially delay the completion of the Offer or a subsequent acquisition transaction prior to the Expiry Time.

InOn ~~light~~July 28, of2006, ~~the~~Inco ~~proposed~~Limited ~~transaction involving~~ (“Inco”) ~~and~~announced ~~Phelps~~that ~~Dodge,~~its ~~under~~offer (the ~~terms~~“Offer”) ~~and subject~~ to ~~the~~acquire ~~conditions~~all of the ~~Fifth~~outstanding ~~Amendment,~~common ~~Falconbridge~~shares ~~has~~of ~~agreed~~Falconbridge toLimited ~~use~~(“Falconbridge”) ~~its~~expired ~~reasonable~~at ~~best~~midnight ~~efforts~~(Vancouver totime) ~~co-operate~~on ~~with~~July 27, ~~Inco~~2006 ~~and~~(the to“Expiry ~~obtain~~Time”). At ~~all~~the ~~necessary~~Expiry ~~consents~~Time ~~and~~fewer ~~approvals~~than ~~with~~50.01% ~~respect~~of to the Falconbridge ~~transactions~~common ~~contemplated~~shares byoutstanding at the ~~Combination~~Expiry ~~Agreement.~~Time ~~Falconbridge~~(calculated ~~has~~on ~~also~~a ~~agreed~~fully ~~to furnish~~diluted ~~Inco~~basis) ~~with~~had been ~~all~~validly ~~information~~deposited ~~concerning~~under itthe Offer and ~~its~~not ~~shareholders~~withdrawn, aswith ~~may~~the beresult ~~required~~that ~~(and, in~~ the ~~case~~Minimum ofTender Condition ~~its~~(as ~~shareholders,~~defined ~~available~~in tothe itOffer) ~~for~~under the ~~preparation,~~Offer ~~filing~~had ~~and~~not ~~mailing~~been ofsatisfied. ~~the~~Accordingly, Inco ~~management~~elected ~~information~~not ~~circular~~ to beextend ~~delivered~~the toOffer, ~~Inco~~did ~~shareholders~~not intake ~~connection~~up ~~with~~any ~~the arrangement,~~common asshares ~~well~~of asFalconbridge under the ~~making~~Offer ofand instructed ~~regulatory~~CIBC ~~filings~~Mellon Trust Company, asthe ~~required~~depositary under the ~~Combination~~Offer, to return all Falconbridge ~~Agreement~~common ~~(discussed~~shares ~~below)~~tendered to the Offer.

~~Combination~~On July 28, Inco also provided notice to Falconbridge that it was terminating the support agreement (as amended, the “Support Agreement”) ~~between~~originally entered into by Inco and ~~Phelps~~Falconbridge ~~Dodge~~on October 10, 2005, as subsequently amended on January 12, 2006, February 20, 2006, March 21, 2006, May 13, 2006, June 25, 2006 and July 16, 2006, respectively, in accordance with its terms as a result of the Minimum Tender Condition not having been satisfied and Inco’s decision not to extend the Offer. Accordingly, under the terms of the Support Agreement, an enhanced expense payment of US$150 million was paid by Falconbridge to Inco and, upon the acquisition of Falconbridge common shares by Xstrata Canada Inc. (a wholly-owned subsidiary of Xstrata plc) under its offer to purchase all of the outstanding common shares of Falconbridge a further US$300 million will become payable by Falconbridge to Inco.

~~Also~~As ~~on June 25, 2006, Inco and Phelps Dodge entered into~~ a result ~~combination~~of ~~agreement (~~the ~~“Combination Agreement”).~~expiration ~~The~~of ~~Combination~~the ~~Agreement provides that~~Offer, ~~upon~~ the ~~terms~~definitive ~~and~~agreement ~~subject~~entered tointo ~~the~~by ~~conditions~~Inco, ~~set~~Falconbridge ~~forth~~and ~~therein,~~LionOre aMining ~~newly-formed,~~International ~~wholly-owned~~Ltd. ~~subsidiary~~ (“~~Subco~~LionOre”) ofwith ~~Phelps~~respect ~~Dodge~~to ~~will~~the ~~acquire all~~divestiture of the ~~issued~~Nikkelverk refinery and ~~outstanding~~related ~~common~~assets ~~shares~~has ofbeen ~~Inco~~terminated. byThis ~~way~~agreement ofwas conditioned aon ~~statutory plan of arrangement effected under~~ the ~~Canada~~successful ~~Business~~completion ~~Corporations~~of ~~Act (~~the ~~“Arrangement”).~~Offer Asand, as a result of ~~the~~its ~~transactions contemplated by the Combination Agreement~~termination, ~~Inco~~a ~~will~~fee ~~become~~of US$32.5 million awas ~~wholly-owned~~paid ~~subsidiary~~by ofInco ~~Phelps Dodge~~to LionOre.

~~Pursuant~~Loan to the terms of the Arrangement, Subco and Inco will amalgamate and each outstanding common share of Inco (other than (x) common shares held by a holder who has validly exercised its dissent rights or by Phelps Dodge or by any subsidiary of Phelps Dodge and (y) restricted Inco common shares) will be exchanged by the holder thereof for Cdn.$17.50 in cash (the “Cash Amount”) and 0.672 of a common share of Phelps Dodge (the “Exchange Ratio”). Each outstanding restricted common share of Inco awarded under Inco’s 2001 Key Executive Incentive Plan and 2005 Key Executive Incentive Plan will be converted into that number of restricted Phelps Dodge common shares equal to the Exchange Ratio plus the quotient of the Cash Amount divided by the closing price of Phelps Dodge’s common shares on the New York Stock Exchange (“NYSE”) on the trading day immediately prior to the closing date of the Arrangement expressed in Canadian dollars (such sum, the “Stock Award Exchange Ratio”). Each outstanding option to acquire Inco common shares, whether or not vested, shall be cancelled in exchange for a fully vested option to acquire that number of Phelps Dodge common shares equal to the number of Inco common shares subject to such Inco option multiplied by the Stock Award Exchange Ratio. The exercise price for each Phelps Dodge common share subject to any such converted option will be an amount equal to the quotient of the exercise price per Inco common share subject to such Inco option divided by the Stock Award Exchange Ratio, subject to certain adjustments as set out in the Combination Agreement.

~~The~~On July 26, ~~combined~~2006, ~~entity~~Inco ~~resulting~~entered ~~from~~into ~~the~~an ~~Arrangement~~Amended ~~will~~and beRestated ~~named~~Loan ~~Phelps~~Agreement ~~Dodge Inco Corporation~~ (the “~~Phelps~~Amended ~~Dodge Inco~~Loan Agreement”). ~~The~~with ~~board~~a ofgroup ~~directors~~ of ~~Phelps~~banks ~~Dodge~~and ~~Inco~~financial ~~will~~institutions, ~~consist~~including ofMorgan 15Stanley ~~members, 11~~Senior ofFunding ~~whom~~(Nova ~~will~~Scotia) beCo. ~~selected~~(“MSSF”), ~~from~~RBC ~~the~~Capital ~~board~~Markets of(“RBC”), ~~directors~~Goldman ofSachs ~~Phelps~~Canada ~~Dodge~~Credit Partners ~~and~~Co. ~~four~~(“GSCCP”) ofand ~~whom~~The ~~will~~Bank ~~be selected~~of ~~from~~Nova ~~the~~Scotia ~~boards~~(“BNS”, ofand ~~directors~~together ofwith ~~Inco~~MSSF, RBC, and ~~Falconbridge~~GSCCP, the ~~respectively.~~“Lead JArrangers”). ~~Stephen~~The ~~Whisler, currently~~Amended ~~chairman~~Loan Agreement amended and ~~chief~~restated ~~executive~~the ~~officer~~terms of ~~Phelps~~the ~~Dodge, will be~~Loan ~~chairman~~Agreement ~~and~~(the ~~chief~~“Loan ~~executive~~Agreement”) ~~officer~~dated as of ~~Phelps~~December 22, ~~Dodge~~2005, among Inco., ~~Scott M. Hand~~RBC, ~~currently~~as ~~chairman and~~administrative ~~chief~~agent, ~~executive~~the ~~officer~~Lead ofArrangers ~~Inco,~~and ~~will~~the ~~become~~other ~~vice~~banks ~~chairman~~and ofother ~~Phelps~~financial ~~Dodge~~institutions ~~Inco.~~party ~~Derek~~thereto ~~Pannell,~~as ~~currently~~lenders, ~~chief~~as ~~executive~~amended ~~officer~~by ofthe ~~Falconbridge,~~First ~~will~~Amendment ~~become~~Agreement ~~president~~and ofSecond ~~the~~Amendment ~~nickel~~Agreement ~~division~~between ofsuch ~~Phelps~~parties ~~Dodge~~dated ~~Inco~~as of January 31, to2006 beand ~~called~~February 20, ~~Inco~~2006, ~~Nickel~~respectively, and ~~will~~by ~~head~~the ~~Phelps~~US$4 ~~Dodge~~Billion Credit ~~Inco’s~~Facility ~~nickel,~~Waiver ~~zinc~~ and ~~aluminium~~ ~~operations.~~Amendment ~~Timothy~~Letter R.dated ~~Snider~~June 25, ~~currently~~2006 ~~president~~between Inco and ~~chief~~the ~~operating~~Lead ~~officer of~~Arrangers ~~Phelps~~(such ~~Dodge~~amendments, ~~will~~together ~~hold the same position~~ with ~~Phelps~~any ~~Dodge Inco~~ and ~~Ramiro~~all G.further ~~Peru~~amendments, ~~currently executive~~the ~~vice~~“Loan ~~president~~Agreement ~~and~~Amendments”). The ~~chief~~Amended ~~financial~~Loan ~~officer~~Agreement ofincreased ~~Phelps~~the ~~Dodge,~~total ~~will~~credit befacility available ~~the~~to ~~chief~~Inco ~~financial officer~~from ofUS$4 ~~Phelps~~billion ~~Dodge~~to ~~Inco~~US$5.5 ~~Mssrs.~~billion ~~Whisler, Snider~~ and incorporated ~~Peru~~the ~~will~~amendments ~~continue~~made to bethe ~~based~~Loan ~~in Phoenix,~~Agreement ~~Arizona,~~pursuant ~~while~~to ~~Mssrs.~~the ~~Hand~~Loan ~~and~~Agreement ~~Pannell~~Amendments through ~~will~~the ~~continue~~date toof bethe ~~based~~Amended inLoan ~~Toronto, Ontario~~Agreement.

~~Under~~On ~~the~~July 28, ~~terms of the Combination Agreement~~2006, Inco ~~and~~delivered ~~Phelps~~a ~~Dodge~~commitment ~~have~~termination ~~made~~notice ~~customary representations,~~to ~~warranties and covenants~~RBC, ~~including,~~as ~~among~~Administrative ~~others, covenants that during the~~Agent ~~interim~~under ~~period between~~ the ~~execution~~Amended ofLoan ~~the Combination~~ Agreement and ~~the~~to ~~effective time of the Arrangement, (a)~~ each of ~~Inco and Phelps Dodge will conduct its respective business in~~ the ~~ordinary course~~Lenders ~~consistent~~under ~~with past practice and in compliance in all material respects with applicable laws and not take any action that would be expected to prevent or materially impair or delay~~ the ~~consummation~~ ofAmended ~~the~~Loan ~~transactions contemplated by the Combination~~ Agreement~~; (b) Inco and Phelps~~, ~~Dodge~~pursuant ~~will use their reasonable best efforts~~ to ~~take~~which ~~all~~Inco ~~actions~~terminated ~~required for~~ the ~~consummation~~Unused ~~of the~~Term ~~transactions~~Loan ~~contemplated~~Commitments byand the ~~Combination~~Unused ~~Agreement;~~Bridge ~~(c) Inco will not engage in~~Loan ~~combinations or other significant transactions; (d) subject to certain exceptions~~Commitments, ~~Inco’s~~each ~~board~~as ~~of directors~~defined ~~will~~in ~~recommend~~the toAmended ~~holders~~Loan ofAgreement. Inco ~~common~~terminated ~~shares that they vote in favour of~~ the ~~Arrangement,~~ ~~and~~commitments ~~will not withdraw such recommendation or modify or qualify such recommendation in~~under ~~any~~the ~~manner~~Amended ~~adverse~~Loan toAgreement ~~Phelps~~because ~~Dodge;~~it ~~(e) subject~~believes ~~to certain exceptions, Phelps Dodge’s board of directors will recommend to holders of Phelps Dodge common shares~~ that ~~they~~it ~~vote~~no inlonger ~~favour~~has ofneed ~~an amendment~~for ~~to Phelps Dodge’s restated certificate of incorporation to increase Phelps Dodge’s authorized common stock, change~~ the ~~name~~loan ~~of Phelps Dodge to “Phelps Dodge Inco Corporation” and~~facilities ~~increase~~available ~~the~~thereunder ~~maximum~~due ~~size of Phelps Dodge’s board from 12~~ to ~~15 directors and~~ the ~~issuance~~expiry of ~~Phelps~~ ~~Dodge common shares pursuant to~~ the terms of the Arrangement (f) subject to certain exceptions, Inco will not solicit any proposals relating to alternative acquisition transactions; and (g) subject to certain exceptions, Inco will not engage in any discussions or negotiations or provide confidential information in connection with any proposals for alternative acquisition transactionsOffer.

The descriptions ~~obligations~~ of ~~Inco~~the ~~and~~Support ~~Phelps~~Agreement, ~~Dodge to effect~~ the ~~Arrangement~~Loan ~~and~~Agreement, ~~complete~~ the ~~transactions~~Loan ~~contemplated~~Agreement byAmendments and the ~~Combination~~Amended Loan Agreement ~~are~~do ~~subject~~not purport to ~~the~~be ~~satisfaction~~complete ~~of certain conditions~~and ~~including,~~are ~~among~~qualified ~~others,~~in ~~(a) approval~~their ofentirety ~~Phelps Dodge’s shareholders (~~by areference ~~vote of a majority of Phelps Dodge’s common shares entitled~~ to ~~vote)~~Exhibit 10.1 ~~of an amendment~~ to ~~its~~Form ~~restated~~10-Q ~~certificate~~(File ofNo. 001-01143) ~~incorporation~~filed toJuly 26, ~~increase Phelps Dodge’s authorized common stock~~2006, ~~change~~Item 1.01 ~~the name~~ of ~~Phelps Dodge to “Phelps Dodge Inco Corporation”~~ and ~~increase~~Exhibit 2.2 ~~the maximum size of Phelps Dodge’s board from 12~~ to 15 ~~directors;~~Form ~~(b) approval~~8-K ~~by Phelps Dodge’s shareholders~~ (byFile ~~a vote of majority of the votes cast at the special meeting as long as the total votes cast represents a majority of Phelps Dodge’s common shares entitled to vote~~No. 001-01143) offiled ~~the issuance of Phelps Dodge common shares pursuant to the terms~~July 20, of2006, ~~the Arrangement; (c)~~Item ~~approval~~1.01 of ~~Inco’s~~and ~~shareholders~~Exhibit 2.2 ofto ~~the~~Form ~~Arrangement~~8-K ~~by special resolution~~ (~~being~~File aNo. 001-01143) ~~resolution~~filed ~~approved~~June 30, by2006, ~~66 2/3% of the votes cast on the special resolution by holders of Inco common shares present in person or by proxy at the Inco shareholder meeting); (d)~~Item ~~expiration~~1.01 ~~or termination~~ of ~~the applicable waiting periods under the United States Hart-Scott Rodino Antitrust Improvements Act of 1976~~ and ~~the~~Exhibit 2.1 ~~European~~to ~~Commission~~Form ~~anti~~8-~~trust~~K ~~Council Regulation~~ (~~EC) 139/2004~~File ~~of 20 January 2004; (e)~~No. ~~approval under the Competition Act (Canada~~001-01143) ~~and~~filed ~~the~~May 15, ~~Investment~~2006, ~~Canada Act; (f)~~Item ~~receipt~~1.01 of an ~~interim order in connection with the Arrangement~~ and ~~a final order approving the Arrangement, in~~Exhibit ~~each~~2.1 ~~case,~~to ~~from~~Form ~~the~~8-K ~~Ontario Superior Court of Justice;~~ (~~g) either~~File ~~(i)~~No. ~~Inco having acquired at least two~~001-~~thirds~~01143) offiled ~~the~~March 24, ~~outstanding~~2006, ~~common~~Item 1.01 ~~shares~~ of ~~Falconbridge under~~Form ~~the~~8-K ~~Offer~~(File ~~and having~~No. ~~completed~~001-01143) afiled ~~compulsory~~January 20, ~~acquisition or a subsequent acquisition transaction~~2006, orand ~~(ii)~~Item ~~the~~1.01 ~~Support Agreement~~of ~~having been terminated in accordance with its terms;~~ and ~~(h)~~Exhibit ~~the~~2.1 ~~Phelps Dodge common shares issuable pursuant~~ to ~~the~~Form ~~Arrangement~~8-K ~~having been approved for listing on the NYSE and the Toronto Stock Exchange~~ (~~“TSX”),~~File ~~subject to notice of issuance~~No. In ~~addition,~~001-01143) ~~Phelps~~filed ~~Dodge will not be obligated to consummate the Combination if holders of more than 10% (or~~October 12, in2005 ~~certain~~which ~~circumstances,~~are ~~15%)~~incorporated ofinto ~~all~~this ofreport ~~the~~by ~~issued and outstanding Inco common shares have exercised dissent rights in respect of the Arrangement~~reference.

Each party’s obligation to complete the transactions contemplated by the Combination Agreement is also subject to certain other conditions, including (i) subject to certain exceptions, the accuracy as of the Closing Date of the representations and warranties of the other party under the Combination Agreement, except for such inaccuracies as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on such party, (ii) performance in all material respects by the other party of its material covenants and obligations under the Combination Agreement, and (iii) the absence of material adverse changes in respect of the other party.

The Combination Agreement contains certain termination rights in favour of each of Inco and Phelps Dodge and further provides that, upon termination of the Combination Agreement under certain specified circumstances, Inco may be required to pay Phelps Dodge a termination payment equal to US$425 million, provided that such amount will be increased to US$925 million from and after the date that Inco has acquired at least two-thirds of the outstanding common shares of Falconbridge. The Combination Agreement also provides that Phelps Dodge may be required to pay Inco a termination payment equal to US$500 million in certain specified circumstances. The Combination Agreement further provides that each of Phelps Dodge and Inco may be required to pay the other party a termination payment equal to US$125 million in certain specified circumstances.

Note Purchase Agreement between Inco and Phelps Dodge

On June 25, 2006, in connection with the entering into of the Combination Agreement, Inco and Phelps Dodge also entered into a note purchase agreement (the “Note Purchase Agreement”) pursuant to which Phelps Dodge has agreed, subject to certain conditions, to purchase up to U.S.$3,000,000,000 aggregate principal amount of Inco 8.0% convertible subordinated notes due April 1, 2012 (the “Notes”). Inco may require the purchase of Notes only to the extent that it requires the proceeds of the Notes for certain permitted uses, being (a) the acquisition of Falconbridge common shares as contemplated by the Support Agreement and/or (b) the satisfaction of the obligations of Inco and Falconbridge to any shareholders who properly exercise dissent rights in respect of a compulsory acquisition or a subsequent acquisition transaction to enable Inco to acquire all of the Falconbridge common shares not acquired under the Offer. Phelps Dodge’s obligation to purchase Notes is subject to, among other things, receipt of customary certificates and opinions from Inco and to (i) approval by the TSX of the issuance and sale of the Notes, the issuance of the Inco common shares issuable upon conversion of the Notes and the listing of such Inco common shares on the TSX and (ii) application having been being made for the listing of such Inco common shares on the NYSE. Phelps Dodge’s obligation to purchase Notes may continue or be terminated after the Combination Agreement is terminated, depending on the circumstances of the termination of such agreement.

The Notes are convertible by the holder, in whole or in part and from time to time, into Inco common shares at a conversion rate equal to 95% of the average closing price of Inco’s common shares on the NYSE over the five trading days preceding the date of conversion, provided, however, that the Notes may not be converted (i) prior to the six-month anniversary of the issuance of the Notes or (ii) if the holder of the Notes and its affiliates would own, together with any persons acting jointly or in concert with the holder and its affiliates, after such conversion, an aggregate of more than 20% of Inco’s outstanding common shares. Inco may deliver cash in lieu of part or all of the amount due upon conversion of the Notes at stated principal amount plus accrued interest.

Phelps Dodge is entitled to customary U.S. registration rights in respect of the Inco common shares issuable upon conversion of the Notes. Upon the conversion of any Note by Phelps Dodge, it may either hold the resulting Inco common shares, in which case it may not vote those shares except pro rata with other voting shareholders, or it may sell the resulting common shares. Such sales may either be in (i) broad, underwritten distributions, or (ii) block sales each representing 5% or less of Inco’s issued and outstanding common shares, provided that Phelps Dodge will use its commercially reasonable efforts in the context of the block trade market to avoid such trade being made to mining industry participants having an equity market capitalization of $10 billion or more. The Notes are redeemable by Inco at its option for cash, in whole or in part at any time (including following notice by the noteholder of its intent to convert) at their stated principal amount plus accrued interest and are mandatorily redeemable by Inco for cash at their stated principal amount plus accrued interest upon a change of control of Inco (other than a change of control resulting in Phelps Dodge controlling Inco).

Phelps Dodge’s commitment to purchase Notes may be terminated: (i) at any time by the mutual written consent of Phelps Dodge and Inco, (ii) if there has been a material breach of (a) any representation or warranty of Inco contained in the Note Purchase Agreement or (b) any of the covenants or agreements contained in the Note Purchase Agreement on the part of Inco, which breach is not curable or, if curable, is not cured within 10 business days after written notice of such breach is given by Phelps Dodge to Inco, (iii) in the case of a change of control of Inco, or (iv) at any time after March 31, 2007. The Note Purchase Agreement can be terminated prior to the initial issuance of Notes if any law is passed that makes the consummation of the transaction contemplated by the Note Purchase Agreement or the Support Agreement illegal or otherwise prohibited.

Co-operation Agreement between Falconbridge and Phelps Dodge

In connection with the Combination Agreement, on June 25, 2006, Falconbridge and Phelps Dodge entered into a co-operation agreement (the “Co-operation Agreement”) pursuant to which Falconbridge has agreed to take certain actions and refrain from taking certain actions in order to facilitate the Arrangement. Among other things, each of Falconbridge and Phelps Dodge has agreed to afford the other with reasonable access to information, subject to the terms and conditions of the confidentiality agreement previously entered into by Falconbridge and Phelps Dodge. In addition, Falconbridge has agreed to furnish Phelps Dodge with information concerning Falconbridge and (to the extent available to Falconbridge) its shareholders for the preparation, filing and mailing of the proxy statement of Phelps Dodge proposed to be delivered to its shareholders in connection with the shareholder approval required to be obtained by Phelps Dodge of the transactions contemplated by the Combination Agreement and the regulatory filings required to consummate the transactions contemplated by the Combination Agreement. Phelps Dodge and Falconbridge have made customary representations, warranties and covenants in the Co-operation Agreement, and the Co-operation Agreement shall terminate upon termination of the Support Agreement by either Inco or Falconbridge or termination of the Combination Agreement by either Phelps Dodge or Inco.

The foregoing descriptions of the Combination Agreement, the Fifth Amendment, the Note Purchase Agreement and the Co-operation Agreement do not purport to be complete and are qualified in their entirety by reference to the Combination Agreement, the Fifth Amendment, the Note Purchase Agreement and the Co-operation Agreement, which are filed as Exhibits 2.1–2.4 hereto and are incorporated into this report by reference.

Source of Funds for Offer to Acquire Falconbridge

In connection with Inco having increased the consideration under its Offer and entered into the Combination Agreement and the Note Purchase Agreement, Inco also entered into an amendment letter (the “Amendment Letter”) dated June 25, 2006 with its lead arrangers (the “Lead Arrangers”) under the previously disclosed loan agreement dated as of December 22, 2005 among Inco, as borrower, Royal Bank of Canada, as administrative agent, the Lead Arrangers and the other banks and other financial institutions party thereto as lenders (such loan agreement, as amended by a First Amendment Agreement dated as of January 31, 2006 and a Second Amendment Agreement dated as of February 20, 2006, the “Existing Acquisition Facilities Credit Agreement”). The Existing Acquisition Facilities Credit Agreement was amended to provide for the following: (i) a “Change of Control” of Inco will be deemed to occur on the effective date of the Combination Agreement, with the result that amounts outstanding under the Existing Acquisition Facilities Credit Agreement may be required to be prepaid and the Existing Acquisition Facilities Credit Agreement terminated within 10 business days of such date, and (ii) an increase in the amount of cash which may be used by Inco to finance its increased Offer and related expenses (collectively, the “Transaction Expenses”).

Inco and the Lead Arrangers also agreed to amend the Existing Acquisition Facilities Credit Agreement to provide, among other things, for the following: (i) an increase in the amount of debt which may be used by Inco to finance the Transaction Expenses, with additional adjustments in the event dissent or appraisal rights are exercised in connection with Inco’s Offer, and (ii) in the event of a credit rating downgrade by two of three credit rating agencies to BB (or equivalent) or lower in respect of Inco, for an additional financial covenant and the grant of security for Inco’s obligations under the Existing Acquisition Facilities Agreement by Inco and each of its subsidiaries located in the United States or Canada over all assets located in the United States or Canada. The first advance under these loan facilities is available until August 10, 2006.

In addition, on June 25, 2006, Inco accepted a commitment from the Lead Arrangers to provide additional financing for the Transaction Expenses, on terms and conditions substantially similar to those under the Existing Acquisition Credit Facilities Agreement (as amended by the Amendment Letter).

Inco intends to finance the cash payable in connection with the Offer through the committed loan facilities referred to above and available cash resources. Inco may also issue Notes pursuant to the Note Purchase Agreement to obtain additional liquidity in connection with the Offer, subject to the requirements of the Note Purchase Agreement.

Important Legal Information

This Form 8-K may be deemed to be solicitation material in respect of Inco’s proposed combination with Falconbridge. Inco filed with the U.S. Securities and Exchange Commission (the “SEC”), on October 24, 2005, a registration statement on Form F-8 (containing an offer to purchase and a share exchange take-over bid circular) and has filed amendments thereto, and will file further amendments thereto as required, in connection with the proposed combination. Inco has also filed, and will file (if required), other documents with the SEC in connection with the proposed combination. Falconbridge has filed a Schedule 14D-9F in connection with Inco’s offer and has filed, and will file (if required), other documents regarding the proposed combination, in each case with the SEC.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.

INVESTORS AND SECURITYHOLDERS ARE URGED TO READ INCO’S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 THAT INCO FILED WITH THE SEC ON MAY 31, 2006, AND ANY AMENDMENTS INCO MAY FILE THERETO, AS IT CONTAINS, AND SUCH AMENDMENTS, IF ANY, WILL CONTAIN, IMPORTANT INFORMATION REGARDING TECK COMINCO’S PROPOSED COMBINATION WITH INCO.

This Form 8-K is not a solicitation of a proxy from any security holder of Inco or Phelps Dodge in respect of Inco’s proposed combination with Phelps Dodge. Inco intends to file a Management Information Circular regarding the proposed ~~transaction~~combination with the securities commissions or equivalent regulatory authorities in Canada and to provide the Management Information Circular to Inco shareholders and Phelps Dodge has filed a preliminary Proxy Statement on Schedule 14A regarding the proposed combination with the SEC. WE URGE INVESTORS TO CAREFULLY READ THE MANAGEMENT INFORMATION CIRCULAR, AND ANY AMENDMENTS INCO MAY FILE THERETO, WHEN IT ~~BECOMES~~ BECOMES AVAILABLE BECAUSE IT, AND ANY SUCH AMENDMENTS, IF ANY, WILL CONTAIN IMPORTANT INFORMATION ABOUT INCO, PHELPS DODGE AND THE PROPOSED COMBINATION. WE URGE INVESTORS TO CAREFULLY READ THE PROXY ~~TRANSACTION~~STATEMENT, AND ANY AMENDMENTS PHELPS DODGE MAY FILE THERETO, BECAUSE IT AND SUCH AMENDMENTS, IF ANY, WILL CONTAIN IMPORTANT INFORMATION ABOUT INCO, PHELPS DODGE AND INCO’S PROPOSED COMBINATION WITH PHELPS DODGE.

Inco, Phelps Dodge and ~~its~~their executive officers and directors may be deemed to be participants in the solicitation of proxies from Inco and Phelps Dodge security holders in favor of Inco’s ~~proposed combination with~~ ~~Phelps Dodge. Information regarding the security ownership~~

proposed combination with Phelps Dodge. Information regarding the security ownership and other interests of Inco’s and Phelps Dodge’s executive officers and directors will be included in the ~~Management~~ Management Information Circular and Proxy Statement, respectively.

Investors and security holders may obtain copies of the ~~registration statement, the~~ Solicitation/Recommendation Statement and Inco’s and ~~Falconbridge~~Phelps Dodge’s other public filings made from time to time by Inco and ~~Falconbridge~~Phelps Dodge with the Canadian Securities Regulators, at www.sedar.com, and with the SEC at the SEC’s web site, www.sec.gov, free of charge. The Management Information Circular (when it becomes available) may also be obtained free of charge at www.sedar.com. In addition, documents filed on SEDAR and with the SEC by Inco may be obtained free of charge by contacting Inco’s media or investor relations departments.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in Item 1.01 of this Current Report on Form 8-K under the headings “Note Purchase Agreement between Inco and Phelps Dodge” and “Source of Funds for Offer to Acquire Falconbridge” is incorporated by reference herein and made a part hereof.

Item 9.01 Financial Statements and Exhibits.

2.1		Combination Agreement, dated June 25, 2006, between Inco Limited and Phelps Dodge Corporation.
2.2		Fifth Amending Agreement, dated June 25, 2006, between Inco Limited and Falconbridge Limited.
2.3		Note Purchase Agreement, dated June 25, 2006, between Inco Limited and Phelps Dodge Corporation.
2.4		Cooperation Agreement, dated June 25, 2006, between Phelps Dodge Corporation and Falconbridge Limited.


99.1		Material change report of Inco Limited dated August 1, 2006 concerning the Inco Rights Plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INCO LIMITED By: /s/ Simon A Fish Simon A. Fish, Esq. Executive Vice-President, General ~~Counseland~~Counsel and Secretary

Date: ~~June~~ August 291, 2006

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
2.1		Combination Agreement, dated June 25, 2006, between Inco Limited and Phelps Dodge Corporation.
99.1		Material change report of Inco Limited dated August 1, 2006 concerning the termination of the support agreement
2.2		Fifth Amending Agreement, dated June 25, 2006, between Inco Limited and Falconbridge Limited.
2.3		Note Purchase Agreement, dated June 25, 2006, between Inco Limited and Phelps Dodge Corporation.
2.4		Cooperation Agreement, dated June 25, 2006, between Phelps Dodge Corporation and Falconbridge Limited.

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