TEMPO.CO, Jakarta - The Ministry of Energy and Mineral Resources (ESDM) has mentioned the possibility of divesting shares of PT Vale Indonesia Tbk (INCO) to the public through the Indonesia Stock Exchange (IDX).

"If MIND ID doesn't buy it, then it might happen as it did before," said Minister of ESDM, Arifin Tasrif, when met at his office in Central Jakarta on Friday, July 14, 2023. "Yes, like what happened in 1990, it will be released on the stock exchange."

Previously, last week, Arifin stated that Vale Indonesia would divest 14 percent of its shares to the state-owned mining holding company, MIND ID. With a 20 percent stake in INCO, MIND ID would have a 34 percent ownership if the agreement goes through.

For information, Vale is required to divest a portion of its shares as a condition to extend its mining concession contract, which expires on December 28, 2025.

In the previous month, Arifin revealed that Vale Indonesia had previously divested its shares by listing them on the Indonesia Stock Exchange in 1990. At that time, the government decided not to buy the company's shares.

"The chronology of PT Vale Indonesia's share divestment in 1990, PT Vale released 20 percent of its shares through the Indonesia Stock Exchange and became a publicly traded company," said Arifin during a working meeting with Commission VII of the Indonesian House of Representatives in Central Jakarta on Tuesday, June 13, 2023.

He explained that the government acknowledged that these shares were a form of divestment to Indonesia. In 2014, he said, the amendment to Vale Indonesia's work contract obligated a divestment of 20 percent. Thus, the total national ownership reached 40 percent.

"In 2020, following the implementation of the amendment, it was carried out through the transfer of 20 percent ownership of Vale Canada Limited and Sumitomo Metal Mining Co. Ltd to PT Indonesia Asahan Aluminium (Persero), now known as MIND ID, so that the national participants' shares reached 40 percent," Arifin explained.

Furthermore, he stated that Vale Indonesia must complete the divestment in order to continue its operations after 2025. According to Law Number 3 of 2020 concerning Mineral and Coal Mining, Arifin explained that a minimum of 51 percent ownership is required for a contract extension.

AMELIA RAHIMA SARI

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