State-owned Mining Industry Indonesia (Mind ID) has signed an agreement on June 19, 2020, to buy 20pc of PT Vale Indonesia’s divestment shares. Major shareholders in the entity presently include Vale Canada Limited (VCL) and Sumitomo Metal Mining (SMM).
Indonesia targets to tighten its grip over the mineral reserves and boost revenue through this acquisition. The deal is likely to conclude by the end of 2020.
After the deal, Vale would hold 44.3pc, Sumitomo will hold 15pc, Mind ID will hold 20pc and the remaining 20pc would be made public.
The deal is based on the 1996 Contract of Work amendment sealed between VCL and the government in 2014 according to which the former has to divest 20pc for Indonesian entities.
The deal would give Mind ID access to one of the largest and best nickel reserves and resources and enable to secure the supply of raw materials for the downstream nickel-based industries in the country. These products could have a higher economic value by 4-5 times than the sale of minerals.