Vale Canada (VCL) and Sumitomo Metal Mining (SMM) have agreed to divest around 14% of their combined stake in PT Vale to state-run mining industry holding company MIND ID.

With this deal , MIND ID will become the largest shareholder in PT Vale, increasing its stake in the company to 34% from 20%.

Vale Canada, a subsidiary of Vale Base Metals (VBM), is set to secure around $160m (C$215.93m) in cash for its stake after the deal is finalised.

VBM Chair Mark Cutifani said: “This agreement signals the commitment made by Vale Base Metals to PT Vale, the Indonesian people and to our stakeholders to unlock value from our assets.

“Our focus will now turn to realising the future potential of PT Vale’s growth investments across Sulawesi.

“Together with our strong international relationships with leading industry partners, automakers and OEMs, Vale Base Metals is uniquely positioned to meet the growing demand for critical minerals for the global energy transition.”

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Post-divestment, VCL and SMM will retain 33.9% and 11.5% stakes, respectively, while nearly 20.6% will remain publicly traded on the Indonesia Stock Exchange.

This divestment is a strategic move that fulfils Indonesia’s divestment obligations and is a crucial step for PT Vale in securing an extension for its mining licence through an IUPK.

Upon completion of the deal, which is anticipated before the end of 2024, subject to customary closing conditions, VCL will continue to have a significant economic interest in PT Vale as a non-operated joint venture partner.

Additionally, VCL will maintain its influence in corporate governance by participating in PT Vale’s board of commissioners.

VBM CEO Deshnee Naidoo said: “We look forward to working closely with our partners under the new balanced shareholding structure. Vale Base Metals’ growth projects will deliver strong value to the Indonesian Government, the local communities and our stakeholders.

“Vale Base Metals remains steadfast in our commitment to growing regional opportunities for the responsible production of low-carbon nickel, copper and other metals critical for the energy transition.”

In July last year, Vale entered two separate agreements to sell a 13% stake in VBM for a total of $3.4bn.