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Vale shareholders tussle over control amid divestiture
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A worker mans a furnace at Indonesian nickel mining company PT Vale's smelter in Soroako, South Sulawesi, on March 30, 2019. (AFP/Bannu Mazandra)
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hareholders of PT Vale Indonesia are reportedly tussling over who will have operation control of the publicly listed nickel mining company and get to consolidate it with their financial statements after an impending divestiture that is required to extend its operations in Indonesia.
Speaking in front of lawmakers on Tuesday, Energy and Mineral Resources Minister Arifin Tasrif revealed that Vale Canada Limited and state-owned PT Mineral Industri Indonesia (MIND ID), as the two biggest shareholders in the company, are each seeking those rights.
“MIND ID also wants the rights to operational control and financial consolidation,” Arifin said, before stopping mid-sentence and going on to the next point of his presentation.
The slide, meanwhile, suggested that, without those two rights, the state-owned enterprise (SOE) would not “earn a profit and may incur a loss”.
Vale has operated in Indonesia since 1968, initially under the contract of work (KK) licenses granted to companies at the time.
Under today’s prevailing Mining Law, however, mining firms must switch to special mining permits (IUPK) should they wish to prolong their operations.
To gain clearance for an IUPK, at least 51 percent of Vale Indonesia’s shares must be held by Indonesian entities or traded on the Indonesia Stock Exchange.
