The Ministry of Energy and Mineral Resources has set a deadline for PT Vale Indonesia Tbk (INCO) until the end of 2024 to submit a proposal for divestment price.
Minister of Energy and Mineral Resources Arifin Tasrif stated that currently, Indonesia is waiting for Vale to submit a proposal. “”If they are late [to submit a proposal], their [license] will be stopped,” Arifin said on Friday (16/6).
Vale’s contract will end on December 2025. However, the process of granting a contract extension will depend on the amount of shares divested by the company to the Indonesian government.
The government asserted that Vale must divest another 11 percent of its shared to fulfil the requirement to convert its work contract into a special mining business license, which is to divest 51 percent of its shares to domestic investors or the government.
Vale’s divestment history
Vale, based on records, has divested 40 percent of its shares for domestic ownership.
Back in 1988, Val had offered 20 percent of its shares to the government as part of the divestment requirement.
The Mining Directorate Decree No. 1657/251/DJP/1989 dated 23 August 1989, the government had obliged Vale to divest 20 percent of its shares through the Jakarta Stock Exchange/
Arifin said that Vale’s offer was ignored by the government because there was no state-owned holding company like MIND ID. As a result, the government instructed Vale to sell its shares publicly.
Later in 2020, Vale sold another 20 percent of its shared to Indonesia to fulfill its work contract obligation.
