MIND ID, VCL & SMM Sign Agreement of Further Divestment of PT Vale Indonesia Tbk

Jakarta, 26 February 2024 – PT Mineral Industri Indonesia (MIND ID), as the representative of the Indonesian Government, together with Vale Canada Limited (VCL) and Sumitomo Metal Mining Co., Ltd (SMM), today, 26 February 2024, has signed a series of definitive agreements in the foreign share divestment of PT Vale Indonesia Tbk (“PT Vale” IDX ticker: INCO).

MIND ID and VCL as well as SMM have agreed on the terms and conditions to acquire the shares of PT Vale by MIND ID which is equal to about 14% (fourteen percent) of the total ownership of shares of PT Vale, which shall be settled immediately after all preconditions have been fulfilled and with due observance to the prevailing provisions of law.

This agreement is a major step for Indonesia as with the settlement of this phase, MIND ID as the Holding State-Owned Enterprise for the Mining Industry, will become the biggest shareholder of PT Vale. Moreover, as stated after the signing of the preliminary agreement on 17 November 2023, MIND ID and VCL will have joint control of PT Vale’s business activities.

This agreement is also part of the efforts of PT Vale to comply with the foreign ownership share divestment obligation based on the legal regulations in the mineral and coal mining field in Indonesia.

MIND ID President Director, Hendi Prio Santoso; Chief Executive Officer of Vale Base Metals, Deshnee Naidoo; and Executive Officer of SMM, Yusuke Niwa; signed the agreement, and witnessed by Coordinating Minister of Maritime and Investment, Luhut Binsar Panjaitan; Minister of State-Owned Enterprises, Erick Thohir; Minister of Investment/Investment Coordinating Board (BKPM), Bahlil Lahadalia; Vice Minister of State-Owned Enterprises, Kartika Wirjoatmodjo; and officials of other countries.

Luhut said that the momentum of signing the agreement to acquire shares of PT Vale by MIND ID is a sign of seriousness on the part of the government in implementing the downstreaming program.

The government ensures that the downstreaming program can become a motor for creating jobs for Indonesia’s economy in facing global challenges.

Moreover, the process of PT Vale share acquisition by MIND ID will be transparent and will not create additional costs on the part of the investor.

“This program is a form of seriousness on the part of the government. We will encourage all forms so that it can be completed soon, particularly IUPK or Special Mining License so that this acquisition process will be settled,” he said.

“This is a historical momentum, as MIND ID will become the biggest shareholder of PT Vale, and together with VCL, have joint control of PT Vale,” said Minister of State-Owned Enterprises, Erick Thohir.

Erick stated that the share price agreed upon is Rp 3,050 per share. MIND ID, together with VCL, will have control over PT Vale Indonesia as this is a joint control over the corporation.

PTVI’s shareholding composition after the agreement would be MIND ID 34.00 percent, VCL 33.88 percent, SMM 11.48 percent, and the public, 20.63 percent.

He believes that the joint corporation in managing PTVI in the future can ensure a better mining ecosystem development from upstream to downstream for Indonesia.  With this momentum, the Government is committed to continuing controlling sustainable investment for downstreaming with the best land size and total investment for Indonesia.

“Of course, we see sustainability as important, we are certain that our commitment and VCL commitment in managing PTVI is similar, and as the first and second largest shareholders, we have agreed to continue the downstreaming commitment as a form of support of the company for the government’s Strategic Program,” said Erick. 

MIND ID President Director, Hendi Prio Santoso, appreciates the support from the Ministry of BUMN, Ministry of ESDM, and other ministries and institutions in the divestment process. Hendi said that MIND ID will continue to collaborate with VCL and other PT Vale stakeholders in developing PT Vale.

“We will optimize the downstreaming process of PT Vale mining products to support domestic industries as well as export needs in support of the downstreaming program,” Hendi added.

The acquisition of PT Vale shares is a strategic step for MIND ID so that Indonesia can take a strong position to safeguard the nickel-based downstream industry raw material supply. This commodity is one of the strategic and important resources for the world, nickel has become the main raw material for electric vehicle batteries and electric storage infrastructure. 

“This corporate action has become a momentum in strengthening Indonesia’s future position in the battery and electric vehicle industry,” Hendi emphasized.