Vale's Divestment Price Has Been Decided, The Former Minister Of Energy And Mineral Resources Says This

Vale Indonesia (Photo: Doc. Vale Indonesia)

JAKARTA - Minister of Energy and Mineral Resources for 2009-2011, Darwin Zahedy Saleh assessed that the process of divesting shares of PT Vale Indonesia (INCO) to the BUMN mining holding, MIND ID, had been going well.

"I think it's good. I congratulate the Indonesian government because the purchase price is not too expensive, it is estimated that observers will correct around 25 percent," Darwin said in the Mining Zone, Monday, February 19.

Darwin said the agreed price between MIND ID and Vale was quite good. According to him, in the divestment process, the first protocol that usually appears is that the purchase price is too expensive compared to the market price.

On the other hand, continued Darwin, if you buy too cheap, you must also pay attention to several things.

"Don't let us imagine that he will rise and then the price doesn't go up. There is a gentle reminder that I want to share with the government that is being trustworthy so that it can maintain this well," Darwin continued.

Darwin further said that the price range of IDR 3000 per share was quite good compared to Vale's first divestment price in 2021 which was charged IDR 800 per share.

"But is it true that this is relatively cheaper than the fair value, the time that can reveal that," concluded Darwin.

Previously, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif said the agreed price between the two companies was final at IDR 3,000 per share.

The release of Vale Indonesia's shares is a burden that must be fulfilled for the extension of the contract which will expire on December 28, 2025. Where, at least 51 percent of the shares are controlled by the Indonesian side.

The composition of Vale Indonesia's shares is 43.79 percent led by Vale Canada Limited who is also a controller. Then, 15.03 is held by Sumitomo Metal Mining. Then, 20 percent is held by the public by the Indonesia Stock Exchange (IDX).

Meanwhile MIND ID owns 20 percent of Vale Indonesia's shares that have been controlled since 2020. So with further divestment of 14 percent, Indonesia even owns 54 percent of Vale Indonesia's shares. In detail, 34 percent of the shares owned by MIND ID and 20 percent of the shares on the IDX.