Nickel miner Vale Indonesia will divest a further 20% stake of the company to Indonesian parties within five years, the firm's chief executive said on Friday, after signing an amended mining contract with the government of Indonesia.
Vale has already divested a 20% stake via its public listing on the Indonesia Stock Exchange.
Also among the provisions of the amended contract, Vale has agreed to pay higher royalties to Southeast Asia's largest economy, effective immediately.
The firm, which produces nickel matte or crude nickel, will now pay 2% royalties to Indonesia, up from between 0.6% and 0.7%, Vale Indonesia CEO Nico Kanter told reporters.
The royalty hike will "definitely affect our bottom line," Kanter said.
The amendment also effectively cuts Vale's total mining concession area to 118 435 hectares down from 190 510 hectares.
Vale will invest $4-billion in plans to develop smelting facilities on the island of Sulawesi, Kanter said, adding that $2-billion each would be spent upgrading its two existing smelters in Pomala and Sorowako.
"We will develop smelters in South Sulawesi, Central Sulawesi and Southeast Sulawesi," Kanter added, without specifying any further details on new projects.
Source: Reuters |
