PT Vale Indonesia Tbk. (INCO) targets the divestment of shares to MIND ID Mining SOE Holding to be completed in 2024.

Filia Alanda, Corporate Secretary of INCO, said that the company had never received an ultimatum from the government regarding the divestment process. However, the Ministry of Energy and Mineral Resources (MEMR) conveyed to INCO the importance of immediately completing the divestment process.

"The divestment process is one of the prerequisites to obtain an extension of the KK Contract of Work in the form of a special mining business license (IUPK) and provide certainty for Vale Indonesia's investment," he explained in a written statement, Thursday (1/18/2024).

Regarding the divestment plan, INCO has submitted it on November 20, 2023. INCO together with Vale Canada Limited (VCL), PT Mineral Industri Indonesia (Persero) or MIND ID, and Sumitomo Metal Mining Co., Ltd (SMM) have signed a Master Divestment Agreement.

The agreement stipulates that VCL and SMM will transfer their proportional shareholding in INCO of around 14% to MIND ID. The transaction is expected to close in 2024.

"Until now, negotiations are still ongoing at the shareholder level and INCO is committed to supporting the completion of the divestment process within the targeted time," said Filia Alanda

This divestment is a requirement for the extension of KK to IUPK. The Company has applied for IUPK in April 2023 as a form of extension of the KK which will end in December 2025.

Currently, the Ministry of Energy and Mineral Resources is still evaluating the company's application and supporting documents. The divestment process is currently ongoing at the majority shareholder level and INCO is committed to continue supporting the process as part of the IUPK issuance.

On the other hand, currently INCO's operational activities are still running normally and there is no impact on the divestment process on operational activities.

MEMR Statement

Previously, Minister of Energy and Mineral Resources (MEMR) Arifin Tasrif requested that the transaction of the remaining divestment obligations of PT Vale Indonesia Tbk. (INCO) be completed in the near future.

Arifin said, the government would take other options if the obligation to divest INCO's foreign shareholders dragged on.

"We hope that the deal will be implemented soon. If it cannot be implemented in a relatively short time, we will think differently," Arifin said during a press conference in Jakarta, Monday (1/15/2024).

However, Arifin was reluctant to specify other possibilities that would be taken by the government if the transaction of transferring foreign shares to the mining state-owned holding, PT Mineral Industri Indonesia (MIND ID) was deadlocked.

"That's just the signal," he said.

Previously, in an official statement from INCO, the transaction of releasing 14% of shares to MIND ID was expected to be completed in 2024 subject to the usual closing conditions. Upon completion, MIND ID will become Vale Indonesia's largest shareholder with 34%.

Meanwhile, Vale Canada Limited, as a subsidiary of Vale Base Metals Limited, will hold around 33.9% of the shares, while Sumitomo Metal Mining Co., Ltd. will hold around 11.5%.

Currently, Vale Canada Limited, as the controller of Vale Indonesia, holds 4.35 billion shares, or 43.79%. Then Sumitomo Metal Mining Co., Ltd. owns 1.49 billion shares, or equivalently 15.03%.

MIND ID's share ownership is currently recorded at 1.98 billion shares, or equivalent to 20%, while public ownership reaches 2.02 billion shares, or equivalent to 20.38%.

Vale Base Metals Limited Chief Executive Officer and Vale President Commissioner Deshnee Naidoo said the divestment master agreement at the end of last year was a significant step towards fulfilling divestment obligations in Indonesia.

Image source: Bisnis-Paulus Tandi Bone

Source: www.market.bisnis.com/Vale Indonesia (INCO) Targetkan Divestasi ke MIND ID Rampung 2024