The divestment of PT Vale Indonesia's shares to the government is yet to reach an agreement. The nickel mining company must sell its shares again so that its Special Mining Business License (IUPK), which expires in 2025, can be extended in Indonesia.

This share sale is necessary because the majority of Vale's shares are still controlled by foreign entities.

Currently, Vale Canada Limited, the parent company of Vale Indonesia in Brazil, holds 43.7 percent of the shares, followed by PT Mineral Industri Indonesia, also known as MIND ID, with 20 percent, Sumitomo Metal Mining with 15.03 percent, and the public with 20.37 percent.

The government entity that will acquire Vale's shares is MIND ID, the holding company for state-owned mining enterprises.

Their plan is to increase their ownership by an additional 14 percent. Consequently, the combined ownership of Vale shares by MIND ID and the public will be approximately 54.37 percent.

However, there is still a tug-of-war in releasing Vale's shares to MIND ID, as Vale wants to retain control.

Letting Vale Canada have control

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif commented on Vale's desire to remain in control. He stated that Vale can maintain operational control, which deals with technical matters within the mining area. Regarding financial matters, they will be discussed with MIND ID.

Mining experts and energy experts consider the Ministry of Energy and Mineral Resources' decision to grant Vale Canada Limited (VCL) operational control of PT Vale Indonesia (Vale) a positive step.

This plan can negate the ambition of PT Mineral Industri Indonesia (MIND ID), the state-owned mining industry holding, which also aims to become the operator of PT Vale Indonesia.

They believe that the continuing divestment process of Vale will likely resemble the divestment mechanism of PT Freeport Indonesia (PTFI). This scheme makes Freeport McMoran the operator of Freeport, even though MIND ID owns 51.2% of the shares (PTFI).

Vale Canada has value, says export

Rizal Kasli, the Chairman of the Indonesian Mining Experts Association (Perhapi), stated that VCL has a strong value as the operator of PT Vale Indonesia. This is based on the company's progress in applying the principles of environmental, social, and corporate governance (ESG) in mining operations.

According to him, VCL, as the operator, will have more flexibility in directing Vale's policies and operational budget to implement internationally standardized ESG mining practices.

This is considered crucial in maintaining Vale's integrity as a mining company that prioritizes environmental sustainability.

Rizal also sees Vale's decision to divest 14% of its shares to a local entity as a positive step to meet the contract extension requirement stated in Article 112 of Law No. 3 of 2020 on Mineral and Coal Mining. This divestment complements the previous 40% share sale to Indonesian entities in 1990 and 2020.

"So, MIND ID will own 34% and Vale Canada will own 33.49%. The share divestment will be proportionally taken from the foreign ownership shares of Vale Canada, Sumitomo Metal, Vale Japan, and Sumitomo," said Rizal.

Based on data from Minerba One Data Indonesia (MODI), the current shareholders of Vale Indonesia are Vale Canada Limited with 43.79%, Sumitomo Metal Mining with 15.03%, MIND ID with 20%, Vale Japan Limited with 0.55%, Sumitomo Corporation with 0.14%, and the public with 20.49%.