Required To Release 11 Percent Of Shares, This Is The Chronology Of Vale's Stock Divestment Since 1990

Minister of Energy and Mineral Resources Arifin Tasrif. (Photo: Doc. Antara)

JAKARTA - The Indonesian government requires PT Vale Indonesia to release its shares of 11 percent to Indonesia as a condition for the extension of the Special Mining Business License (IUPK).

In a Working Meeting with Commission VII DPR RI, Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif explained, the chronology of PT Vale Indonesia's stock divestment in 1990.

"PT Vale melepaskan 20 persen sahamnya melalui IDX dan menjadi perusahaan terbuka," ujarnya dalam Raker dengan Komisi VII, Selasa 13 Juni.

He added that the government acknowledged that the shares listed on the IDX were the fulfillment of divestment for Indonesian participants.

Then in 2014, he continued, the contract amendment by Vale was obliged to further divest by 20 percent so that the total national ownership became 40 percent.

"In 2020, the follow-up to the amendments, so it has been 6 years, it was carried out with the transfer of ownership of 20 percent of Vale's shares from Vale Canada Ltd and Sumitomo Metal Mining Co Ltd to PT Indonesia Alumunium (Persero), or now MIND ID," explained Arifin.

Thus, he said, the shares of the national participants had reached 40 percent and the settlement of this divestment was an obligation that had to be fulfilled by Vale in order to continue his operations after 2025.

In accordance with Law number 3 of 2020, it is stated that the minimum requirement of 51 percent is a requirement for the extension of the IUPK.

"Vale has stated that the divestment process can begin, this is on January 31, 2023. For that, it is recommended to Vale to be able to offer it to the government since March 2023," Arifin continued.

He said, if in May 2023, the Ministry of Energy and Mineral Resources through the Director General of Mineral and Coal held a meeting with relevant agencies, in this case the Ministry of SOEs, the Ministry of Investment/BKPM, the Ministry of Finance, to discuss the investment.

As for the 20 percent share divestment in 1990, it was based on a Letter from the Director General of General Mining. Meanwhile, on August 23, 1989, the government decided not to buy shares of the company.

"The government asks companies to conduct stock offerings through the Jakarta Stock Exchange or the Jakarta capital market implementing agency," he said.

He said, in a 1996 contract, the government acknowledged that it would not ask companies to offer or sell to Indonesian participants other than shares that had been sold to the public according to Bapepam's license.

Shares of companies sold on the Exchange are recognized as Indonesian share ownership.

Arifin explained, based on the monthly report on the registration of securities holders in June 2023, the composition of PT Vale's shareholders on the stock exchange as follows, Vale Canada Limited at 43.79 percent, MIND ID 20 percent, Sumitomo Metal Mining Co. Ltd at 15.03 percent, the public / public at 21.18 percent consisting of foreign investors 59.47 percent, and national investors 40.53 percent.

The regulation of share divestment has been regulated in Article 14 of the Regulation of the Minister of Investment/Head of BKPM number 4 of 2021 which states that the obligation to divest shares of PMA's business entities can be carried out on Indonesian citizens or Indonesian business entities owned by Indonesian citizens through direct ownership in accordance with the agreement of the parties or the domestic capital market.

In article 147 PP 96 of 2021, the obligation to divest 51 percent is carried out in stages from the central government, regional governments, BUMN, BUMD, or national private business entities.

If no one is interested, the investment offering mechanism will be carried out through the Indonesian Stock Exchange.

Just so you know, in the context of managing the extension of PT Vale's KK after December 29, 2025, according to Article 147 PP 96 of 2021, PT Vale must divest another 11 percent of its shares so that national ownership becomes 11 percent.

The determination of the divestment scheme and composition of the amount of divestment shares is also carried out based on the management as in the business practice, where the implementation of statements of interest is coordinated by the government through ministers together with provincial governments, district/city governments, BUMN, and BUMD.

"In addition, the government can also form or appoint a special company that will buy divestment shares," Arifin continued.

Previously, his party had recently held a meeting with Vale on May 4, 2023.

During the meeting, he said that Vale opened up opportunities for share divestment greater than 11 percent, with operational control rights, and financial consolidation.

"MIND ID also wants operational control and financial consolidation rights. PT Vale has not yet conveyed the investment share price," concluded Arifin.