Vale's Divestment Deal Inked: Is Indonesia Truly Benefitting?

Indonesia's state-owned enterprise holding company, MIND ID, has increased its stake in PT Vale Indonesia by 14 percent. Following this acquisition, MIND ID now represents the government as the majority shareholder in the nickel company, holding 34 percent ownership. The pivotal event, titled 'Signing of Definitive Transaction Agreement for the Acquisition of PT Vale Indonesia Shares,' occurred at the Pullman Hotel in Central Jakarta on Feb 26.

Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan emphasized that MIND ID acquired Vale Indonesia shares at Rp 3,050 per share in that divestment process. With this majority ownership, the government aims to enhance the company's involvement in Indonesia's mineral downstreaming program. "Despite being well-managed, I see that the downstreaming program is still lagging behind others, and this needs to be addressed," Luhut stated.

Erick Thohir, the State-Owned Enterprises Minister, stated that the additional shares in Vale Indonesia would bring numerous advantages to Indonesia. He noted that with this increase, the government could secure Indonesian representation on Vale's board of directors. "The CEO stays, and we will have a seat in the board of commissioners," he affirmed. Erick assured that MIND ID would also have control over Vale Indonesia's operations besides being the majority shareholder, although not as the primary controlling entity. "We join the management."