Vale's Royalty Payment Rises
18 October 2014 15:52 WIB
TEMPO.CO, Jakarta - Vale Indonesia’s president director Nico Kanter said the company’s royalty payment has been increased from 0.9 percent to 2 percent of its product sales. In addition, Vale is also required to pay 3 percent royalty when the nickel matte price exceeds US$21,000 per ton.
The increase is in line with the mining contract amendment signed by the company and the government represented by Energy and Mineral Resources (ESDM) acting minister Chairul Tanjung.
“The amount of royalty agreed has been in line with the royalty structure set forth in the government regulations and reflected the market dynamics,” Nico said on Friday, October 17, 2014.
Based on the contract amendment, Vale is also required to divest 40 percent of its shares, including 20 percent of its shares owned by public at the Indonesian Stock Exchange, to Indonesian investors.
“The divestment process will be carried out within five years,” Nico said.
The contract amendment is valid until December 28, 2025 and can be extended for two terms of a 10-year period in form of operation permit.
BERNADETTE CHRISTINA MUNTHE
