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Indonesian Government Should Control Majority of Vale Indonesia Shares

Jakarta – Member of Commission VI DPR RI from the Gerindra faction Andre Rosiade revealed the importance of divesting foreign mining companies, for the independence and sovereignty of mineral and coal mining in Indonesia.

Andre said, divestment is a mandate from Law Number 3 of 2020 which stipulates that foreign mining companies in Indonesia are required to reduce share ownership by 51 percent to be transferred to the state. He believes that the sovereignty of mining products is an important point to multiply state revenues.

“It is time for the wealth of this country to be managed and utilized as much as possible for the prosperity of the Indonesian Nation, as well as for mineral wealth. So it is time through BUMN Holding Mining we can realize this ideal,” Andre said in his official statement, Wednesday (5/24/2023).

“These ideals can be realized through the presence of various Smelter Projects which are being focused on and accelerated, so that the selling value of these mineral products can double through the Downstream program,” he said.

Furthermore, Andre assessed the importance of Indonesia adding shares in PT Vale Indonesia (PTVI) which is not only used as an interest for Vale Indonesia to extend its contract from a Contract of Work (KK) to a Special Mining Business License (IUPK).

However, it must be based on the interests of the future of the Indonesian nation as well as the sustainability of mining in Indonesia. So that the addition of 11 percent, 14 percent is not enough to make Indonesia through the BUMN Mining Holding, MIND ID can have controlling control over the foreign mining company.

Furthermore, Andre views that the DPR and the government should encourage SOEs through MIND ID to become majority shareholders as well as controlling shares with a minimum ownership of 40 percent, or even up to 51 percent.

The next important point that needs to be considered is financial consolidation. Andre said this needs to be done so that all assets in the Vale Indonesia area can be recorded as assets of the Indonesian Government after MIND ID becomes the controlling shareholder of Vale Indonesia.

“Regarding the addition of share ownership in PT Vale Indonesia, MIND ID, which currently has 20 percent and will add 11 percent, does not have a maximum impact on BUMN contributions to Indonesia. Because MIND ID as an extension of the State does not have full power, because it is not yet a majority shareholder,” added Andre.

“Apart from being the majority shareholder in PT Vale Indonesia, MIND ID also needs to monitor the running of the company both from a financial perspective, such as the need for consolidation. But not only that, the absorption of local labor, the welfare of the surrounding community, as well as the handling of waste and environmental damage also need to be a concern and need to be improved,” he said. (InfoPublik.id/foto: Kontan)

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