Brazilian mining giant Vale is set to divest a 14% stake in Vale Indonesia, Reuters reported, citing Indonesian Minister for Energy and Mineral Resources Arifin Tasrif.

The divestment will bring down Vale’s interest to less than 51%, adhering to a law in the country that mandates foreign companies to sell 51% of their interest to local businesses after operating for a certain time.

For foreign companies, the sale is a prerequisite to extending their operation permit in the country. Vale’s existing contract will expire in 2025.

Tasrif stated that there will be a ‘special pricing’ for the sale, without disclosing pricing specifics. The Indonesian Government aims to secure a deal this year.

Vale also needs to demonstrate advancement in its nickel processing facilities’ construction within three years, after the permit is extended.

The minister was quoted by the news agency as saying: “For this extension, they have to carry out all those programmes. If they don’t do them in three years, it (the extension) will be terminated.”

The mining company did not confirm the development.

In September, Vale Base Metals, which controls the Indonesian business via Vale’s Canada-based subsidiary Vale Canada, pledged $10bn (C$13.8bn) towards the country over the coming decade.

Vale Canada owns a 43.79% stake in Vale Indonesia while Vale Japan holds 0.54%. Sumitomo Metal Mining has a 15.03% stake in the unit.

Vale Base Metals and its partners are building two facilities to support nickel ore processing for use in electric vehicle batteries, as well as one plant to manufacture metal.

Once completed, the projects are expected to bring the total estimated amount of annual nickel production from the present 75,000 tonnes (t) to nearly 300,000t.

In August 2023, Vale signed a cooperation agreement with China’s Zhejiang Huayou Cobalt and PT Huali Nickel Indonesia to develop high-pressure acid leaching facilities in Indonesia.