Vale’s Shares Rise After New CEO Appointment

By Gabriel Araujo

SAO PAULO (Reuters) – Shares of Vale rose on Tuesday as analysts and investors welcomed the appointment of Gustavo Pimenta as the Brazilian miner’s next CEO, starting next year.

Pimenta, Vale’s head of finance, was unanimously picked by the company’s board of directors to replace outgoing CEO Eduardo Bartolomeo. Vale’s announcement followed a tumultuous succession process characterized by board member departures amid allegations of political influence.

At 46, Pimenta has served as Vale’s CFO since 2021 after a 12-year tenure at U.S. energy company AES (NYSE:AES).

Analysts predict that this decision will lessen uncertainty around the company’s strategy and alleviate the factors that have negatively impacted Vale’s stock this year.

By midday, shares of Vale traded on Sao Paulo’s exchange surged around 3%, making it the leading gainer on Brazil’s benchmark stock index, Bovespa, which rose 0.2%. To date, Vale shares are down 16%.

“Pimenta has built a solid reputation with investors and within the mining community,” said analysts from BTG Pactual, led by Leonardo Correa. They noted the timing of the announcement as surprising, as they expected it to be made by December.

The acceleration of this process was seen as a way to de-risk the equity story, marking an important governance victory for Vale and the country.

Media reports suggested the Brazilian government was attempting to influence the CEO selection process, especially following President Luiz Inacio Lula da Silva’s criticism of Vale due to two deadly tailing-dam collapses.

Vale, privatized in the 1990s, remains under significant governmental influence since its main shareholders include a pension fund managed by state-run Banco do Brasil.

Analysts from Genial Investimentos praised Pimenta’s familiarity with the sector and Vale’s assets. They stated that his appointment would likely diminish governmental ties to the CEO position, viewing the decision as assertive while raising questions about who will succeed Pimenta as CFO.