As part of the deal, Vale is selling a 14.9% stake in Vale Indonesia for IDR4.12bn ($290m), while Sumitomo Metal Mining is offloading the remaining 5.1% stake
Brazilian miner Vale and its Japanese partner Sumitomo Metal Mining are selling a stake of 20% in Vale Indonesia (PT Vale), a publicly-listed Indonesian copper ores company, to Indonesia Asahan Aluminium (Persero), also called Inalum, for IDR5.52bn ($371m).
The buyer Inalum is an Indonesian state-owned entity, which makes investments in the mining sector. Its association with the copper ores company is expected to significantly contribute to the continuous development and operational expansion of the latter’s businesses in the country.
Inalum was recently renamed as MIND ID.
As part of the deal, Vale is selling a 14.9% stake in Vale Indonesia for IDR4.12bn ($290m), while Sumitomo Metal Mining is offloading the remaining 5.1% stake.
Established in 1968, the Indonesian mining company produces nickel in matte from lateritic ores at its integrated mining and processing facilities located near Sorowako on the island of Sulawesi.
Why Vale and Sumitomo are reducing their stakes in Vale Indonesia
The deal has been taken up by the Brazilian mining company and Sumitomo Metal Mining in order to fulfill certain requirements to ensure that the Indonesian firm is entitled to have its license extended to continue operations beyond 2025.
In October 2014, the copper ores company signed an amendment to its 1996 Contract of Work with the Indonesian government, which will be expiring in December 2025.
After completion of the transaction, Vale will reduce its stake in the Indonesian mining company to 44.3%, while Sumitomo Metal Mining will bring down its stake to 15%. A stake of about 21.18% is held by public shareholders and others.
Vale stated: “Indonesia plays a major strategic role within the global nickel industry. This transaction represents an important development in PT Vale’s long presence in Indonesia and reinforces Vale’s commitment to keep investing in the region.”
The deal is expected to be closed by the end of 2020, subject to receipt of regulatory approvals.