The Ministry of Energy and Mineral Resources (ESDM) is targeting the divestment process of 14% of PT Vale Indonesia Tbk (INCO) shares to finish in July 2024.

Minister of Energy and Mineral Resources Arifin Tasrif said that before completing the divestment process, the government will finalize the extension of Vale Indonesia's Special Mining Business License (IUPK) first.

According to him, there are several considerations related to the issuance of the IUPK, namely if it does not have one, it will be difficult to get approval from the Financial Services Authority (OJK) due to high uncertainty.

"(Both) parties (MIND ID and PT Vale Indonesia) agreed that the IUPK should be issued before the divestment of shares, the conditional sales and purchase agreement is binding, and there is anti-trust approval from several countries to see the government's seriousness in issuing the IUPK for PT Vale Indonesia," Mr Arifin said in a press release on Sunday (7/4).

Arifin continued, that the draft IUPK license extension has been sent to the Minister of Investment/Head of the Investment Coordinating Board through letter number T-154/MB.04/MEM.S/2024 dated March 22, 2024, regarding Introduction to the Granting of IUPK as a Continuation of PT Vale Indonesia's Contract / Agreement Operations.

Previously, the Ministry had conducted an evaluation related to the technical administrative aspects of the environment, finance, and company performance.
 

Arifin added that as one of the approvals for the determination of the entire area development plan (PPSW) to apply for a contract extension to IUPK, PT Vale Indonesia is obliged to carry out investment commitments and their financing.
 

"What has been agreed is the investment project for the Sorowako nickel mine and HPAL of USD 2 billion which will start-up in 2027, then investment in the nickel mine and HPAL in Pomalaa of USD 4.6 billion which will start-up at the end of 2026, and investment in the Bahodopi nickel mine and RKEF of USD 2.6 billion which will start-up in 2026," he added.
 

The flow of the divestment process is expected to be completed in July 2024 with several milestones, namely on April 19, 2024, an extraordinary general meeting of shareholders (EGMS) will be held. Then, on June 5, 2024, there will be a rights issue confirmation by the OJK. June 21-27, 2024 is the rights issue period, and July 1, 2024, is the allotment of share distribution.
 

Kontan noted that Vale Indonesia Management hopes that the IUPK document from the government can be issued soon. With this IUPK, certainty related to the company's future investment plans will be guaranteed.
 

Vale Indonesia Senior Manager Communication Bayu Aji said that Vale has not received the IUPK document, but all the requirements have been fulfilled.
 

Vale is still waiting for the IUPK document as it is still in the hands of the government.
"At the moment, we have not received the documents and it is hoped that it will be soon," said Bayu in Jakarta, some time ago.
 

He explained that the IUPK will provide assurance and certainty of investment plans amid Vale Indonesia's efforts to develop three new nickel smelter projects with a total investment of USD 9 billion in South Sulawesi (Sorowako), Southeast Sulawesi (Polamaa), and Central Sulawesi (Bahodopi).

Image source: KONTAN / doc. INCO
Source: https://investasi.kontan.co.id/news/divestasi-vale-indonesia-inco-ditargetkan-kelar-pada-juli-2024-1