Vale Canada, Sumitomo Metal sign initial deal to sell 14% stake in Indonesian nickel miner

Sumitomo Metal Mining

17/11/2023 18:14

JAKARTA, Nov 17 (Reuters) - Mining company Vale Base
Metals said its unit Vale Canada Ltd and Japan's Sumitomo Metal
Mining Co. Ltd signed an initial agreement on Friday to sell a
14% stake in their Indonesian nickel mining unit to Indonesia's
state miner.
    Vale Canada and Sumitomo  5713.T  signed a heads of
agreement to sell the shares to PT Mineral Industri Indonesia
(MIND ID), the country's state mining holding company, Vale Base
Metals said in a statement.     
    Share divestment is a condition required by Indonesia to
extend Vale Indonesia's mining permit, which is currently due to
end in 2025. Foreign investors are required to divest 51% of
their stake to local buyers after a certain period of operation.
    Upon completion, MIND ID will become the largest shareholder
of Vale Indonesia with 34% of shares, up from 20%. Vale Canada
and Sumitomo will hold 33.9% and 11.5% respectively, according
to the statement, down from 43.79% and 15.03%.
    Around 20% of Vale Indonesia's shares are publicly traded.
    A "balanced" management structure will be set up to maintain
operational stability at the Indonesian unit, the statement
said.
    "We look forward to working within the new shareholding
structure with our partners to support the country's
downstreaming ambitions and deliver strong economic value to our
stakeholders and communities over the long run," said Deshnee
Naidoo, chief executive of Vale Base Metals.
    Indonesia, which has major nickel reserves, is keen to
develop batteries and electric vehicles to take advantage of its
rich nickel reserves.
    Vale Base Metals is committing around $10 billion of
investment in Indonesia over the next decade.

 (Reporting by Fransiska Nangoy; Editing by Kirsten Donovan)
 ((fransiska.nangoy@tr.com;))