Tuesday, April 16, 2024

Vale denies reaching agreement with MIND ID on divestment share price

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Gusty da Costa

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PT Vale Indonesia, a subsidiary of Canadian company Vale, has denied the Indonesian government’s claim that Vale Indonesia and Indonesian state-owned mining holding company MIND ID had reached an agreement with the government on the price of divestment shares.

Corporate Secretary of PT Vale Indonesia, Filia Alanda, said that as part of the divestment process, the company has completed the shares valuation by using the method based on the prevailing regulation and has submitted any required data to the government for the shares valuation required for the divestment. 

“Until today, there is no agreement that has been signed by the company and the company’s shareholders on the divestment shares price,” Filia said in a statement on Friday, February 23, 2024.  

She said PT Vale Indonesia, along with Vale Canada Limited (VCL), MIND ID, and Sumitomo Metal Mining (SMM), has signed the Heads of Agreement on Divestment. The agreement provided that VCL and SMM will proportionally divest their shares at around 14 percent to MIND ID, and the transaction is expected to be completed at the earliest opportunity. 

Divestment of Vale Indonesia’s shares is required as one of the conditions so that the extension of its mining contract to a Special Mining Business Licence (IUPK) can be carried out. PT Vale Indonesia’s Contract of Work will expire in December 2025. Indonesia’s ownership in PT Vale Indonesia (INCO), among others through MIND ID, is 20 percent and another 21.18 percent is spread across the Indonesian stock market. This implies that in the case of the supplementary shares amounted to only 14 percent, MIND ID will possess a 34 percent stake in Vale’s shares.

Currently, VCL retains the majority stake in INCO with 43.79 percent of shares, followed by SMM, which holds a significant portion at 15.03 percent. The company’s operational and financial performance are still running normally and there is no impact of the ongoing divestment process on its operational activities.

As previously reported, Energy and Mineral Resources Minister Arifin Tasrif reveals that Indonesia’s state-owned mining holding company MIND ID and PT. Vale Indonesia have reached a deal on divestment share price.

Arifin said the price of the divestment share is lower than Vale’s shares price in the Indonesian stock market on Friday, which was at Rp 3,890 (25 U.S. cents) per share.

The average price of Vale’s share is Rp 4,600 (29 U.S. cents) per share in the last three months.

He said that immediately after achieving the deal, MIND ID completed the transaction for 14 percent of Vale Indonesia shares. ” They have paid already,” Arifin said in Jakarta on Friday, February 16, 2024.

Both parties were finalizing the administration and legal draft of the deal and extension of PT Vale Indonesia’s special mining business permit (IUPK), which would be announced on Monday, February 19,2024. “I want it to be finished by Monday (Feb. 19, 2024),” Arifin said last week.

Gusty da Costa

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Editor

 

Interview

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