Vale Canada Ltd., a subsidiary of Vale Base Metals, Ltd., signed an agreement on November 17, 2023, with PT Mineral Industri Indonesia (MIND ID) and Sumitomo Metal Mining Co., Ltd. (SMM) to sell an approximate 14% equity interest in PT Vale Indonesia Tbk (PT Vale) to MIND ID. The transaction will make MIND ID the largest shareholder of PT Vale, holding about 34% of the shares. Vale Canada Ltd. and SMM would now hold approximately 33.9% and approximately 11.5% respectively of Indonesia’s largest and oldest nickel company.

The agreement was signed on the sidelines of the Asia-Pacific Economic Cooperation Leaders’ Meeting 2023, at a ceremony attended by Indonesia President Joko Widodo, Vice Minister of State-Owned Enterprises Kartika Wirjoatmodjo and other government officials.

To extend PT Vale’s mining license beyond 2025, Vale Canada Ltd. had to relinquish control of the company to an Indonesian operator. Foreign mining investors are now required to divest 51% to local operators after a certain period. The move will also allow PT Vale to invest in new growth projects at Bahodopi, Sorowako and Pomalaa, which could represent $8.6 billion in investment for Indonesia.

Vale Base Metals said that Indonesia and PT Vale will remain important drivers of its global nickel production growth, which has potential to increase to more than 300,000 metric tons per year (mt/y) from roughly 175,000 mt/y today.

The transaction is expected to close in 2024, subject to customary closing conditions.