The Ministry of SOEs supports the divestment process of 11% of shares owned by a nickel mining company, PT Vale Indonesia Tbk (INCO).
SOE Minister Erick Thohir revealed that the Ministry of SOEs had participated in a Limited Meeting (Ratas) led directly by President Joko Widodo and several related ministries such as the Coordinating Minister for Maritime Affairs and Investment, Minister of Energy and Mineral Resources, Minister of Finance, to the Coordinating Minister for the Economy. From this average, it was agreed that SOEs would play a role in the divestment process of Vale Indonesia.
This is considered a win-win solution, as is the role of SOEs through Mind ID which was also involved in the divestment of PT Freeport Indonesia (PTFI) shares in 2018.
At that time, the divestment allowed PTFI to become part of the national mining ecosystem by building a copper smelter. In fact, SOEs have also played a role in the development of 5G technology at PTFI’s Grasberg mine.
“Vale Indonesia also has attractive prospects. To build that ecosystem, SOEs cannot move alone. SOEs can partner with foreign or private parties,” said Erick in a press conference at the Ministry of SOEs Building, Monday (2/1).
He also said that the divestment of Vale Indonesia’s shares is an important agenda. This is considering Indonesia’s position as one of the largest nickel producers in the world. The demand for these commodities is predicted to be higher in the future.
“The business process (divestment of Vale Indonesia’s shares) must be carried out transparently and openly,” he added.
In previous reports, Vale Indonesia confirmed that it is ready to divest 11% of its shares as a continuation of its commitment to extend the Contract of Work (KK) into a Special Mining Business Permit (IUPK).
Vale Indonesia’s contract of work permit will expire on December 27, 2025. As part of the license extension to IUPK, Vale Indonesia is required to divest 51% of its shares.
Previously, the Indonesian Mining Industry Holding aka MIND ID had acquired 20% of Vale Indonesia’s shares. The transaction value of the acquisition made in June 2020 reached US$ 290 million.
Vale Indonesia Finance Director Bernardus Irmanto once revealed that of the total obligations of 51% of shares that must be divested, 40% of the divestment has actually been carried out, of which 20% is by MIND ID and 20% of floating shares on the stock exchange. This means that there are still 11% of Vale Indonesia’s remaining shares that are ready to be divested.
Image source >>> KONTAN/Dimas A Shadewo