Arifin Tasrif, the Minister of Energy and Mineral Resources, has revealed that PT Vale Indonesia has signed a Head of Agreement (HOA) concerning the divestment of its 14% stake to the Indonesian state-owned mining holding company, MIND ID.
Arifin mentioned that the signing of the HOA took place during the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, United States, coinciding with the APEC event.
Regarding the divestment price, Arifin explained that the price has not been determined yet but emphasized that it should be lower than the market price.
Concerning the specifics of which party would reduce its share portion, Arifin did not disclose the details but mentioned that the total divestment involves Vale and Sumitomo, but only mentions the total divestment reaches 14%.
As per Minerba One Data Indonesia (MODI), Vale Indonesia's current shareholders include Vale Canada Ltd (43.79%), Sumitomo Metal Mining (15.03%), MIND ID (20%), Vale Japan Ltd (0.55%), Sumitomo Corporation (0.14%), and the public (20.49%).
The additional divestment of a 14% stake to a local entity is a requirement for the extension of the mining work contract (KK), as stipulated in Article 112 of Law No. 3 of 2020 concerning Mineral and Coal Mining.
According to this regulation, Vale is obliged to divest 51% of its shares to local entities, and the company must divest an additional 11% to meet this requirement.
Arifin Tasrif stated that with this divestment, MIND ID would hold a 34% stake in Vale, making it the majority shareholder. This divestment increases Indonesia's ownership of Vale to 54%, comprising 20.49% public ownership and 34% MIND ID ownership.
The divestment of Vale's shares is a prerequisite for the company to obtain the Special Mining Business License (IUPK), as the mining concession is set to expire on December 28, 2025.
Tag
Already have an account? Sign In
-
Start reading
Freemium
-
Monthly Subscription
30% OFF$26.03
$37.19/MonthCancel anytime
This offer is open to all new subscribers!
Subscribe now -
Yearly Subscription
33% OFF$228.13
$340.5/YearCancel anytime
This offer is open to all new subscribers!
Subscribe now
Set up email notifications for these topics
