DIGIVESTASI - The administration of Indonesian President Joko Widodo (Jokowi) is back on track. Most recently, on Monday (February 26, 2024), the company plans to sell its 14% stake in Brazilian multinational nickel mining company PT Vale Indonesia Tbk (INCO) to "Mother Earth" through MIND ID. Holding. This is not the first time a foreign mining interest has been acquired in Indonesia.

As is known, in 2018, President Jokowi's administration also officially became the majority shareholder of PT Freeport Indonesia (PTFI) with a 51.2% stake through MIND ID starting in 2021. The sale of Vale is one of the conditions for the extension of the company's Contract of Work (CoW) into a Special Mining Business License (IUPK) which expires in December 2025.

MIND ID's shareholding in Vale di Indonesia Tbk is currently only 20%, with around 21.18% spread across the Indonesian stock market. This means that if the additional shares are only 14%, then MIND ID will own 34% of Vale's shares.

Meanwhile, the majority of Vale's shares are currently held by Vale Canada Limited (VCL) with 43.79% ownership, followed by Sumitomo Metal Mining. Ltd (SMM) 15.03%.

Until this news is revealed, it is still unclear where the 14% reduction in MIND shares came from, whether directly from Vale Canada Limited or distributed to Sumitomo. Previously, President Jokowi met directly with Deshney Naid, CEO of Vale Base Metals, at the Four Seasons Hotel in San Francisco, USA in November 2023. Friday (November 17, 2023) to be precise.

During the meeting, the President said that Indonesia welcomed Vale's 14% increase in MIND ID shares. "This sale will make us the largest shareholder in Vale's MIND ID and allow MIND ID and Vale Canada to exercise joint management rights at Vale," Jokowi said.

During the meeting, President Jokowi also witnessed the signing of a framework agreement between MIND ID, Vale Canada, and Sumitomo Metal Mining on the sale of Vale Indonesia shares.

Signed Monday afternoon

According to CNBC Indonesia, the signing of the acquisition of 14% of Vale shares will take place at 4:00 pm in Jakarta.

Indeed, the implementation of this divestment acquisition was explained by SOE Minister Eric Thohir, which is planned to be signed on Monday (February 26, 2024) at 16.00 WIB.

What is certain is that the signing of the agreement on Monday at 16.00 will be attended by Mr. Arifin (Minister of Energy and Mineral Resources), Mr. Baril (Minister of Investment), and Mr. Luhut (Coordinating Minister for Mavs), and myself," explained Minister Eric at the BUMN Ministry office, last Tuesday. (2024/02/20).

Unfortunately, Minister Eric does not seem to want to announce the selling price of his 14% stake in MIND ID. He only said that as a minister, he cannot reveal anything except black and white. Moreover, Vale is a

Listed Company on the Indonesia Stock Exchange (IDX).

"If it's 4pm (Monday), what's the sign?" Alright, let's talk about that over there. "I can't comment much because it's a listed company, but it seems like they have rules that make me think the issuer made a mistake," Eric said.

Rules apply

The extension of Mining Contracts that will expire into IUPK is actually already contained in Law Number 3 of 2020 concerning Mineral and Coal Mining (Minerva). Article 169-A stipulates that every contract/agreement that does not receive an extension is guaranteed two extensions of 10 years each in the form of an IUPK by taking into account state revenue. Article 169A (b) then regulates that contracts / agreements that receive the first extension are guaranteed a second extension in the form of an IUPK for up to 10 years.

Meanwhile, the rules regarding the release of shares are contained in a derivative regulation of the Mineral and Coal Law, namely PP Number 96 of 2021 concerning the Implementation of Business Activities in the Mineral and Coal Mining Sector, which is further contained in the Mineral and Coal Law replacing Number 23. 2010. The obligation to sell 51% of shares to foreign investors will be carried out in stages over a period of 15 to 20 years.

Divestment Price

Previously, Minister of Energy and Mineral Resources Arifin Tasrif revealed that the agreed share purchase price was lower than Vale's current share price, which is around Rp 3,000 per share. "(Vale's share price) is about Rp 3,000 cheaper," Arifin said at the Jakarta Oil and Gas Directorate some time ago.

Ariffin said the price included a discount from the market price. He also announced that he would announce the completion of the sale of Vale shares in the coming days. "We expect it to be signed in the next few days." Let's wait a few more days. We hope to finalize it on Monday, but the team is still working on it. Be patient," he said.

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