Brazilian mining giant Vale’s subsidiary PT Vale Indonesia, along with its shareholders Vale Canada and Sumitomo Metal Mining has signed a heads of agreement (HoA) with PT Indonesia Asahan Aluminium (Persero), also known as Inalum.

The agreement marks the beginning of a strategic collaboration between PT Vale and Inalum in managing Indonesia’s strategic mineral resources.

As part of the agreement, Inalum intends to acquire PT Vale’s 20% divested shares to fulfil the latter’s divestment obligation.

The two companies did not disclose the value of the deal.

Reuters stated that the planned sale was flagged by the Indonesian Government on 8 October as Vale Indonesia seeks to comply with rules, under which foreign miners are required to gradually reduce their ownership to 49% or below within ten years of starting operations.

Mining Industry Indonesia spokesman Rendi Witular said: “The (shareholder) structure is still being discussed, but foreign participation will be reduced to 60% or less.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

All the parties involved in the transaction are planning to sign key definitive agreements by the end of this year.

The transaction is expected to be completed within six months after the execution of these deals.

Vale said that the signing of this agreement enables the company to contribute to the development of Indonesia.

Furthermore, the agreement will bolster its long-term commitment to value-added processing of nickel resources and sustainability, as well as local empowerment in Indonesia.

The company also appreciated the Government of the Republic of Indonesia for its continuous support towards the divestment obligation.

In October 2014, PT Vale Indonesia signed a Contract of Work (CoW) with the Indonesian Government to extend its operations in the country to 2045.