Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Inalum plans to acquire an additional 20pc stake in Vale’s nickel-producing subsidiary, PT Vale, in Indonesia for $375mn. 


According to media reports, the move by the state-owned mining company is in line with an Indonesian government directive that caps the mine ownership by foreign companies at 49pc in any Indonesian subsidiary after 10 years of establishment. 


PT Vale’s stakes are divided among Vale Canada (58.7pc) and Sumitomo Metal Mining (SMM) (20.9pc) with the balance held by Inalum. 


Under the agreement, Vale and SMM will divest 14.9pc and 5.1pc, respectively, of their stake to Inalum, increasing the latter’s ownership to 40.4pc in the nickel producing company. 


This transaction gains importance in light of the recent surge in demand for nickel from the EV industry for battery production. The Indonesian government will capitalize on the profits made from these sales, media reports indicated. 


Indonesia is the largest nickel producer in the world with an output of 800,000mt of the metal in 2019. This year, global nickel production is estimated at 2.7mn mt of which around 27pc will come from Indonesia.  

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