PT Vale Indonesia Tbk
Vale Canada Ltd. (VCL) together with Sumitomo Metal Mining Co. Ltd. (SMM) has signed definitive agreements for the sale of a 20% stake of PT Vale Indonesia Tbk (PT Vale) to PT Indonesia Asahan Aluminium (Persero) 1, also known as Inalum.
In October 2014, PT Vale signed an amendment to its 1996 Contract of Work with the Government of the Republic of Indonesia, which will expire in December 2025. For PT Vale to be entitled to an extension of its license to operate beyond 2025, requirements need to be fulfilled, which includes the divestment of 20% of PT Vale shares to Indonesian participants.
The company said the transaction represents an important development in PT Vale’s long presence in Indonesia and reinforces its commitment to keep investing in the region.
Inalum is the Indonesian state-owned entity for investments in the mining sector and its association with PT Vale contributes to the continuous development and operational expansion of its businesses in Indonesia.
The final terms and conditions include the secondary purchase of 20% of PT Vale shares by Inalum, and the maintenance of financial and operational control of PT Vale by VCL, as well as the financial and production consolidation in its financial statements.
After the closing of the transaction, Inalum will have acquired 20% of PT Vale shares, with 14.9% from VCL and 5.1%from SMM. Vale and SMM will then have a stake of 44.3% and 15% in PT Vale, totaling a 59.3% participation.
For its stake, VCL will receive approximately US$290 million in cash upon closing of the transaction, which is expected to happen by the end of 2020.
