Metal mining company PT Vale Indonesia Tbk (INCO) has confirmed that it will divest 11 percent of its shares to the Mining BUMN Holding MIND ID. Currently, the composition of INCO’s shareholders is Vale Canada 43.79 percent, MIND ID or Inalum 20 percent, Sumitomo Metal Mining 15.03 percent, and the public 21.18 percent. Two foreign shareholders of Vale Indonesia, Vale Canada Limited and Sumitomo Metal Mining, are said to be ready to release their ownership following divestment obligations related to efforts to negotiate the transition of the status of the contract concession to a special mining business permit (IUPK) with the government. INCO’s contract of work is scheduled to expire on December 28, 2025.
“Actually, this divestment is carried out by foreign shareholders, Vale and Sumitomo from both sides are confident that they are ready to release,” said PT Vale Indonesia Tbk (INCO) President Director Febriany Eddy during the signing of the Bahodopi Block Project Investment Agreement, Jakarta, Tuesday ( 6/9/2022).
Febriany emphasized that the two foreign majority shareholders were willing to comply with the mandatory divestment provisions mandated by the government as a condition for the transition to the status of Vale’s nickel mining concessions spread across South, Central and Southeast Sulawesi Provinces. The Vale mining concession area reaches 118,000 hectares. Nevertheless, Febriany said, the company is still focused on pursuing nickel production and downstreaming of its derivative products through the massive construction of processing and refining facilities in the concession area.
Until the middle of this year, INCO has not received any further news regarding the acquisition of the remaining 11 percent of its shares which have not been held by the domestic public. “We want to focus on doing all of our homework, our new contract of work obligations, we are in a position to ask for an extension,” he said. On the other hand, Minister of Energy and Mineral Resources (ESDM) Arifin Tasfrin said the government continues to coordinate to accelerate the implementation of INCO’s share divestment obligations before the deadline for Vale’s contract of work to expire in three years.
The mandate is contained in Law no. 3/2020 concerning Amendments to Law No. 4/2009 concerning Mineral and Coal Mining (Minerba). Business entities holding mining business licenses are required to divest 51 percent of their shares in stages to the central government, regional governments, BUMN, BUMD or the private sector. “This is a rule in the legislation,” said Arifin when met at the Borobudur Hotel, Jakarta, Tuesday (6/9/2022). INCO currently has a nickel processing and refining facility in Sorowako with a capacity of 70,000 tons of nickel matte. In addition to the existing project, Vale plans to build three new smelters. First, the Reduction Kiln-Electric Furnace (RKEF) nickel processing facility with an estimated production of 73,000 tons in the form of FeNi (ferronickel) in Morowali, Central Sulawesi. Second, the Pomalaa High Pressure Acid Leaching (HPAL) plant construction project located in Kolaka Regency, Southeast Sulawesi with a potential production capacity of 120,000 tons.