TORONTO, Feb. 26,
2024 /PRNewswire/ - Vale Base Metals ("VBM")
informs that Vale Canada Limited ("VCL") signed a Definitive
Agreement ("Agreement") with PT Mineral Industri Indonesia ("MIND
ID") and Sumitomo Metal Mining Co., Ltd. ("SMM") regarding the
divestment obligation of PT Vale Indonesia Tbk ("PT Vale"). Under
the Agreement, VCL and SMM will divest approximately 14 per cent
pro-rata combined equity interest in PT Vale to MIND ID.
Upon completion of the transaction, MIND ID will hold
approximately 34 per cent of PT Vale's issued shares, making it the
largest shareholder in the company. VCL and SMM will hold 33.9 per
cent and 11.5 per cent, respectively. Approximately 20.6 per cent
will continue to be held by the public on the Indonesia Stock
Exchange.
Transaction background
In October 2014, PT Vale
signed an amendment to its 1996 Contract of Work with the
Government of the Republic of Indonesia, which is set to expire in
December 2025. Under the prevailing
laws and regulations, PT Vale has to achieve 51 per cent Indonesian
ownership by December 2025 as part of
the extension of its long-term operating license.
VBM Chair Mark Cutifani
said, "This Agreement signals the commitment made by Vale Base
Metals to PT Vale, the Indonesian people, and to our stakeholders
to unlock value from our assets. Our focus will now turn to
realizing the future potential of PT Vale's growth investments
across Sulawesi. Together with our strong international
relationships with leading industry partners, automakers, and OEMs,
Vale Base Metals is uniquely positioned to meet the growing demand
for critical minerals for the global energy transition."
VBM Chief Executive Officer Deshnee Naidoo said, "We look
forward to working closely with our partners under the new balanced
shareholding structure. Vale Base Metals' growth projects will
deliver strong value to the Indonesian government, the local
communities, and our stakeholders. Vale Base Metals remains
steadfast in our commitment to growing regional opportunities for
the responsible production of low-carbon nickel, copper, and other
metals critical for the energy transition."
The transaction
For its stake, VCL will receive approximately US$160 million in cash upon closing of the
transaction, which is expected to happen before the end of 2024,
after the satisfaction of customary closing conditions.
Once completed, the transaction fulfils Indonesia's divestment obligations and
satisfies a key condition for PT Vale to extend the life of its
mining license through the issuance of a Special Mining Business
License (IUPK). Following transaction closure, VCL will maintain
significant economic exposure to PT Vale as a non-operated joint
venture and will continue to provide strong governance through the
Board of Commissioners.
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SOURCE Vale Base Metals