INCO - Divestment progress to be completed in Jun’24

INCO - Divestment progress to be completed in Jun’24 The Indonesian government, represented by the state-owned mining holding MIND ID, has formally sealed an agreement to acquire a 14% stake in Vale Indonesia (INCO). The agreement, signed on Monday afternoon (26/2/2024), entails MIND ID acquiring 14% joint share ownership of Vale Canada Limited (VCL) and Sumitomo Metal Mining Co., Ltd (SMM) in INCO, valued at IDR3,050 per share. This strategic move amounts to a total investment of USD300 mn from MIND ID, approximately IDR4.69 tn based on an exchange rate of IDR15,635 per USD. The payment for this acquisition is slated for completion by June 2024. Comment : The acquisition price closely aligns with the rumored figure, representing approximately a 20% discount from the current market value. Consequently, the announcement could trigger a transient downturn in share price. However, it ensures the sustained operational viability of INCO and secures the progress of future projects over the long haul.