Erick Thohir asks for cheap divestment share prices, Vale boss says this

Jakarta –

BUMN Minister Erick Thohir said that the mining land owned by PT Vale Indonesia Tbk (INCO) will be shortlisted if Vale does not want to provide a low price for share divestment. Vale CEO Febriany Eddy opened his mouth about this statement.

“I leave it to shareholders to negotiate with the government,” he said when met at Senayan Park, Jakarta, quoted on Saturday (25/11/2023).

Regarding the valuation of the divested shares which were considered expensive, Febriany explained that there was no agreement regarding the price. According to him, the decision is in the hands of shareholders.

“Well, I don’t know the price yet. Ask the shareholders, it’s not me who is selling shares,” he added.

So far PT Vale Indonesia has the following share ownership structure: Vale Canada Limited 43.79%, Sumitomo Metal Mining (SMM) 15.03%, BUMN MIND ID mining holding 20%, public share ownership 20.64% and Vale Japan Limited 0.54%. Reportedly the ownership of Vale Canada Limited and also Sumitomo Metal Mining will be divested.

Febriany also welcomed the initial agreement, aka heads of agreement (HOA), to divest shares of 14%. The agreement was made between the shareholders, namely Vale Canada Limited, MIND ID, and Sumitomo Metal Mining.

“From Vale we welcome the agreement between our three main shareholders, Vale, Sumitomo and MIND ID. And we can also see that these three shareholders will collaborate and work together to build and grow PT Vale. I think this is a good thing ,” he said.

According to him, the signing of the HoA is a step forward to complete the divestment obligation as a condition for extending the operating permit which will expire in 2025.

“We have great hope that our ESG commitment, which has been consistently carried out for 5 decades, can provide confidence, can extend our permit so that we can build a better Indonesia together,” he added.

Previously, Erick said that if Vale was reluctant to provide a low price, he would threaten to relinquish or shrink Vale Indonesia’s mining land.

“(Vale is asking for a premium price). That can’t be done, then we will relinquish some of the (mining land) owned by those who don’t comply with their commitments,” he said.

(ily/hns)