PT Vale Indonesia has defended its commitment to developing Indonesia’s downstream industry against harsh criticism.

Vale Indonesia head of communications Bayu Aji explained that “despite existing dynamics,” the nickel mining company was optimistic about the progress on its three flagship projects.

“Currently, we are focused on completing these three projects and publishing their progress on our website and on social media,” he told The Jakarta Post on Friday.

Vale Indonesia’s statements follow harsh criticism from one of its shareholders, state-owned mining holding company MIND ID, concerning the company’s three ongoing projects: two nickel smelter facilities that cost US$2 billion and $2.5 billion in Sorowako and Bahodopi, respectively, both located in South Sulawesi, as well as the $4.5 billion Pomalaa project in Central Sulawesi.

“If [Vale’s] development commitments are not fulfilled in accordance with the work contract, it is necessary to [process] relinquishment in the areas related to the projects,” MIND ID president director Hendi Prio Santoso told House of Representatives Commission VII, which oversees energy and mineral resources, on Tuesday.

Expected to be one of the largest nickel smelters in the world, the high-pressure acid leaching (HPAL) Pomalaa project is estimated to generate 120,000 tonnes of nickel per year. It is targeted to produce mixed hydroxide precipitate (MHP), which is generally used to manufacture batteries for electric vehicles (EVs).

Meanwhile, the HPAL nickel smelter in Sorowako, construction of which is planned to be completed in 2025, is estimated to have a production capacity of 60,000 tonnes in MHP.

Read also: MIND ID to ramp up Vale divestiture, citing unmet commitments

Hendi also mentioned President Joko “Jokowi” Widodo’s request for MIND ID to own 51 percent of Vale Indonesia’s private shares.

Currently, Vale Canada Ltd, a subsidiary of Brazilian mining company Vale, and Japan-based Sumitomo Metal Mining Co. Ltd. own 43.79 and 15.03 percent of Vale Indonesia, respectively, while MIND ID owns 20 percent, Vale Japan Ltd 0.54 percent and the investing public owns the remaining 20.64 percent.

Vale Indonesia said in the statement that 20 percent of the company’s shares held by the public through the Indonesia Stock Exchange satisfied the requirement for a divestment of shares to Indonesian investors.

Furthermore, Vale Canada and Sumitomo Metal Mining signed agreements in 2020 for the sale of 20 percent of Vale Indonesia to MIND ID, which is the share that MIND ID holds today.

“This further satisfies the 40 percent divestment obligation as per Vale Indonesia’s 2014 contract of work,” the statement reads.

Energy and Mineral Resources Minister Arifin Tasrif said on Friday that the Vale Indonesia divestiture must be finalized immediately to ensure investment certainty.

“We have received [the review document]. Don’t go through the media, try direct communication,” he told reporters in Jakarta when asked about MIND ID’s request that the ministry consider its review of Vale Indonesia’s performance, which alleges unmet targets.

Arifin requested that MIND ID submit its opinion of Vale Indonesia’s concession status directly to the energy ministry toward the end of the nickel company’s work contract in December 2025.

The minister approved Vale Indonesia's investment proposal for the entire area development plan on April 10. The document contains plans to change Vale Indonesia's investment license for the period after the extension of the contract to a special mining business permit (IUPK).