Vale Indonesia is Indonesia's largest nickel producer. (GA Photo/Mohammad Defrizal)
Inalum Signs Preliminary Agreement for Vale Divestment
OCTOBER 14, 2019
Jakarta. Indonesia Asahan Aluminium, the state-owned mining holding company, has entered into a preliminary agreement with Vale Indonesia and two of its shareholders – Vale Canada and Sumitomo Metal Mining – to acquire 20 percent of the shares in the company, Indonesia's largest nickel producer, Vale Indonesia said in a statement on Monday.
Last week, the government appointed Indonesia Asahan, or Inalum, to acquire the shares before the deadline for relinquishing them comes at the end of this month.
"The signing of the agreement is the first step in a long-term strategic cooperation between Vale and Inalum in managing strategic mineral resources in the country," Vale Indonesia said in the statement.
The companies plan to draw and sign definitive agreements by the end of this year and expect a financial close for the transaction six months after the signing, Vale Indonesia said.
Vale Canada controls 58.73 percent of Vale Indonesia and Sumitomo Metal Mining controls 20.1 percent. The remainder of the shares are controlled by the public (20.5 percent), Vale Japan (0.55 percent) and Sumitomo Corporation (0.14 percent).
Neither Vale nor Inalum has announced a valuation for the share acquisition.
After Vale Indonesia released its statement, the company's shares rose 3.1 percent in the first session of trading on Monday, extending their rally into a fourth day and boosting their market capitalization to Rp 39 trillion ($2.8 billion).