Japan’s Sumitomo Metal Mining Co., Ltd. (SMM) has signed, together with Vale Canada Ltd., the definitive agreements for the divestment of a 20 per cent stake of PTVI Indonesia Tbk to PT Indonesia Asahan Aluminium (Inalum) on 19 June.
In October 2014, PTVI signed the amendment to its 1996 Contract of Work with the Government of the Republic of Indonesia, which is set to expire in December 2025. In order for PTVI to be entitled with the extension of its licence to operate beyond 2025, certain requirements need to be fulfilled, including the divestment of 20 per cent of PTVI shares to Indonesian participants.
After the closing of the transaction, Inalum will have acquired 20 per cent of PTVI shares, being 5.1 per cent from SMM and 14.9 per cent from VCL. SMM and Vale will then have a stake of 15.0 per cent and 44.3 per cent, respectively, in PTVI. The amount received by SMM for the sale of these shares is approximately 10.6 billion yen. It shall have slight impact on SMM’s financial performance.