Indonesian Minister of Energy and Mineral Resources Arifin Tasrif stated that Vale Canada Limited (VCL) insisted on being the controlling shareholder of PT Vale Indonesia Tbk. (INCO) after the planned divestment. As previously reported, the divestment is part of the requirement to convert Vale’s work contract into a special mining business permit (IUPK).
Arifin said that Vale provided an opportunity to divest more than 11 percent of its shares to PT Mineral Industri Indonesia (Persero) or MIND ID. However, Vale insisted on being the controlling shareholder.
“Vale give an opportunity of more than 11 percent divestment, with operation control rights and financial consolidation,” Arifin said.
Arifin added that Vale’s board of directors’ offer has been expressed in a meeting with the government.
“MIND ID also wanted to have operational controlling rights and financial consolidation because if we only buy an additional 11 percent of share without such rights, MIND ID will not receive benefits and may potentially suffer losses,” Arifin said.
Request for government support
MIND ID is currently asking for the government’s support in negotiating with Vale to become the controlling shareholder in the company.
In relation to this effort, the Ministry of Energy and Mineral Resources has issued Letter No. T-782/MB.04/DJB.M/2023 on March 13, 2023, asking for Vale to make an offer for the divestment to the government. However, the company is yet to make any offer until now.
“Until now, Vale is yet to propose a price for its share divestment, so the process is still ongoing,” Arifin said.
Divestment misunderstanding
On another note, Minister of Investment and Head of the Investment Coordinating Board Bahlil Lahadalia recently admitted that there was a misunderstanding in relation to Vale’s divestment.
Bahlil said that the government and MIND ID had different views on Vale’s obligatory 11 percent investment.
The government’s understanding was Vale had only need to divest another 11 percent of its shares to convert its work contract into a special mining business permit. The reason was because Vale had previously divested 20 percent of its shares to an Indonesian company two times.
“But the State-Owned Enterprise insisted on having a 51 percent of share ownership [by itself] and this is still debatable and must be discussed together,” Bahlil said after a meeting with Commission VI of the House of Representatives on Friday (9/6).
