Ongoing Negotiations for Divestment of PT Vale Indonesia Shares

The Ministry of Energy and Mineral Resources (ESDM) in Indonesia is actively engaged in the negotiation process regarding the divestment of a 14% stake in PT Vale Indonesia Tbk (INCO). According to the Director of Mineral and Coal Program Development, Ing Tri Winarno, the negotiations are still in progress, focusing on the valuation of the shares. Tri highlighted the recent fluctuations in INCO's share prices, suggesting that a discount might be applied in the final agreement.

Bambang Suswantono, the Acting Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, emphasized the importance of considering diplomatic factors in the negotiation process. He pointed out that the majority of nickel smelters in the region are currently dominated by Chinese interests, and retaining a non-Chinese stake in INCO is crucial for maintaining a healthy international investment perception in Indonesia.

Vale Canada Limited (VCL), which holds a significant stake in INCO, has reportedly proposed a valuation of 1.5 times the price to book value (PBV) for the 14% share divestment. However, this proposal has met with some resistance. Arifin, in a recent press conference, indicated that demanding 1.5 times the PBV may not be appropriate, hinting at the potential exploration of alternative options if a timely agreement is not reached.

The outcome of these negotiations is eagerly awaited, given its potential impact on the regional nickel industry and broader investment landscape in Indonesia. The resolution of this divestment could have significant implications for the diversification of investment in the country's mineral and coal sectors, and for maintaining a balance of international interests in Indonesia's valuable natural resources.