UPDATE 2-Vale divestment in Indonesian nickel unit expected to finish in July

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JAKARTA, April 3 (Reuters) - Indonesia's mining minister on Wednesday said divestment of Vale Canada Ltd and Sumitomo Metal Mining Co. Ltd's shares in their nickel miner unit Vale Indonesia is expected to conclude in July.

The transaction is required by the government to extend Vale Indonesia's operating permit beyond 2025.

Vale Canada and Sumitomo agreed to divest a 14% stake in nickel unit to Indonesia's mining industry holding company, MIND ID, taking MIND ID's ownership to 34% from 20%.

While the transaction is being processed, Minister Arifin Tasrif told a parliament hearing that the government is finalising the approval of Vale Indonesia's new permit which will be valid until 2035 and can be extended by 10 years.

"The evaluation process of Vale Indonesia's contract extension to be a special mining permit is done in term of administration, technical, environment, financial and corporate perfomance," Arifin said.

The Energy and Mineral Resources Ministry has drafted the new permit and submitted the papers to the Investment Ministry for approval, he added.

Vale Indonesia's spokesperson on Monday said the company hoped the new permits could be issued soon as it would be crucial for it to move forward with its investment plans.

Vale, with its partners, is investing over $9 billion in nickel mines and nickel processing plants, including two plants to produce materials used in batteries for electric vehicles. (Reporting by Fransiska Nangoy and Bernadette Christina Munthe; Editing by Martin Petty and Tomasz Janowski)