President Joko Widodo (Jokowi) has informed that the government will make a decision this month regarding its plan to push the nickel mining company PT Vale Indonesia (INCO) to divest more its shares.
The discourse on divestment came because the company's operational period and contract will expire on December 28, 2025.
"God willing, we will soon decide on that matter this month. Most importantly, we should prioritize national interests," Jokowi told reporters at Halim Perdanakusuma International Airport in Jakarta on Monday.
A decision on the divestment will be reached in the interest of national interests and will be in line with the government's downstreaming and industrialization plans, he stated.
He affirmed that the government has been looking for ways to become the majority stakeholder with 51 percent of INCO's shares without harming investors.
"We do not want to harm investors. We are looking for a win-win solution while ensuring that the industrialization and downstreaming efforts go as planned," he explained.
The majority of INCO's shares are currently owned by foreign investors, namely Vale Canada Limited (VCL) (44.3 percent) and Sumitomo Metal Mining Co. Ltd (SMM) (15 percent).
The Indonesian government has only 20 percent of shares through the state-owned mining holding company MIND ID. The remaining 20.7 percent shares are public shares listed on the Indonesia Stock Exchange (IDX).
In order to extend its Special Mining Business Permit (IUPK), INCO needs to divest up to 11 percent of its shares, so the government's stake in the company will become 31 percent.
However, a 31-percent stake would still not be sufficient to make the government a majority shareholder in the company since the shares released to the public are owned by foreign institutions, not domestic investors.
The government's goal of becoming a majority shareholder in INCO would be a major achievement, as it would allow the country to regain control of its nickel wealth and create a suitable ecosystem for electric vehicles.
The success of the divestment plan will follow the government's successful reclaiming of a 51 percent stake in mining company PT Freeport Indonesia.
Image source: ANTARA/Mentari Dwi Gayati
Source: https://en.antaranews.com/news/287016/government-to-decide-on-vale-divestment-this-month-jokowi
