Inalum Eyes 20 Percent Stake in Vale Indonesia

Inalum eyes 20 percent stake in Vale Indonesia. State mining holding company PT Indonesia Asahan Aluminium (Inalum) is prepared to buy a 20 percent stake in publicly listed nickel miner PT Vale Indonesia (INCO) as part of the latter’s divestment obligation.

Inalum president director Budi Gunadi Sadikin said Monday that his firm was interested in and ready to acquire a stake in Vale, but only if the government appointed it to do so.

“We want [a 20 percent stake of Vale], but only if we are appointed by the government. If we already have the assignment, then we are more than ready [to take it],” he said on the sidelines of a House of Representatives hearing.

He added that the firm had discussed the possibility of acquiring a 20 percent stake in Vale with both the government and Vale itself.

Inalum said it estimated a 20 percent stake in Vale at a value of less than US$1.5 billion.

When asked about the source of funding to acquire the 20 percent stake in Vale, Budi pointed to two options, namely a bond issuance or a bank loan.

“If we have enough internal cash, we will do it with our own money. However, if we don’t have it, then we will take a loan,” he said.

Based on Vale’s contract of work (KK), updated in 2014, the firm is obliged to divest 40 percent to shareholders in Indonesia, 20 percent of which have been done through Indonesia Stock Exchange (IDX).

The deadline for offering the remaining 20 percent is October 2019, but previously Vale Indonesia president director Nicolas Kanter said the firm wanted to settle the matter before the deadline as a gesture of goodwill to the government.

The government is still evaluating the divestment of Vale through the Energy and Mineral Resources Ministry and targets to complete the evaluation in August.

Once it has been evaluated, the ministry will submit the evaluation report to the Finance Ministry and State-owned Enterprises (SOE) Ministry before making the final decision on whether the state wanted to take the 20 percent stake in Vale or not.

“We are still evaluating our recommendation [to buy or not to buy] Vale’s 20 percent shake [to be divested]. The recommendation will be submitted to the Finance Ministry and SOE Ministry to be assessed again with regard to the valuation of the shares,” said the ministry’s mineral and coal mining director general, Bambang Gatot Ariyono. Inalum eyes 20 percent stake in Vale Indonesia (evi, Stefanno Reinard Sulaiman, The Jakarta Post)