JAKARTA (RambuEnergy.com) – Nickel producer PT Vale Indonesia Tbk (IDX:INCO), previously known as INCO, said it remains on track to divest 20% of the company’s shares to the Indonesian government or a state-owned company mandated by the government.
The company currently mulls various options on how to divest the shares. Media reports today indicated that Vale is likely to divest the shares through the rights issue scheme.
Director for Minerals at the Energy and Mineral Resources Ministry Yunus Saifulhak confirmed that the company will sell 20% of its shares to a state-owned company through rights issue mechanism.
The obligation to divest shares is required under the Contract of Works and Government Regulation No. 77 2014.
The state-owned company that has expressed interest to purchase the shares is PT Inalum, the holding of state-owned mining companies.
The company is yet to disclose the value of the 20% shares to be divested.
The company has notified the Energy and Mineral Resources Ministry on Nov. 29, 2018, over the divestment plan.
Vale has amended its mining contractor Contract of Work (CoW) with the Indonesian government on Oct. 17,2 014. The amendment encompassed reduction of the mining area, an increase of royalty paid to the government, an extension of operational lifetime and divestment.
As for divestment, Vale is obliged to divest up to 40% of its shares, on condition that the company built smelting plan domestically, which Vale has done. Otherwise, it has to divest up to 51% of the company’s shares. (*)