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Inalum, Vale Indonesia sign agreement to start divestment
The terms of the divestment are to be finalized by December 2019, with the stock acquisition to be completed within six months thereafter.
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A haul truck passes by two workers at a nickel mine belonging to PT Vale Indonesia in this file photograph. Vale Indonesia has signed an agreement to divest 20 percent of its shares to state-owned mining holding company Inalum. (KONTAN/Cheppy A Muchlis)
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tate-owned mining holding company Inalum has signed an agreement to acquire a 20 percent stake in publicly listed nickel miner Vale Indonesia as part of the mandatory divestment program.
Under the divestment agreement signed in Jakarta on Oct. 11, the two companies are to finalize the terms of the acquisition by the yearend, including share valuation and ownership structure. The stock acquisition is to be completed six months after the terms have been finalized.
“The agreement puts Vale in the right position to contribute in developing Indonesia and in reinforcing the company’s long-term goal of managing nickel resources to make production more value-added, sustainable and empowering for the country,” Vale Indonesia chief financial officer Bernardus Irmanto said in a statement following the signing.
Inalum, which recently rebranded as MIND.ID, said in a separate statement after the signing that the holding company “will have access to one of the world’s largest and best nickel reserves” with its 65 percent ownership of diversified miner Aneka Tambang (Antam) and 20 percent ownership of Vale Indonesia.
The statement quoted Inalum corporate secretary Rendi Witular as saying that this access would give the holding company – and by extension, the Indonesian government – more leverage in securing domestic nickel reserves for local industries rather than for export.
“This access will also accelerate downstreaming of the domestic nickel industry, which will create downstream products with four to five times the value of upstream products,” said Rendi.
He cited stainless steel and electric vehicle batteries as two examples of lucrative downstream nickel products, the demand for which were expected to grow in the next few years.
