By Gabriel Araujo
SAO PAULO (Reuters) – Vale shares rose on Tuesday after analysts and investors welcomed the appointment of Gustavo Pimenta as the Brazilian miner’s next CEO, starting next year.
Pimenta, Vale’s finance chief, was unanimously chosen by the company’s board of directors to replace outgoing CEO Eduardo Bartolomeo, Vale said late on Monday, wrapping up a noisy succession process that had seen board members depart amid accusations of political influence .
Pimenta, 46, has been Vale’s CFO since 2021, after twelve years as an executive at American energy company AES (NYSE:).
Analysts expect the decision will reduce uncertainty about the miner’s strategy and remove an overhang on Vale’s shares that has weighed on the stock this year.
Vale’s Sao Paulo-traded shares rose about 3% around midday, making it the biggest gainer on Brazil’s benchmark stock index, which added 0.2%. Year-to-date, Vale is down 16%.
“Pimenta has built a solid reputation among investors and within the mining community,” said BTG Pactual analysts led by Leonardo Correa. The timing of the announcement was a surprise as they expected it to happen in December.
The process was “significantly accelerated in our view as a way to narrow the equity story,” they added in a note to clients. “It is an important victory for the Vale board and also for the country.”
According to media reports this year, the Brazilian government tried to influence the choice of CEO. President Luiz Inacio Lula da Silva has repeatedly criticized Vale for the collapse of two deadly tail dams.
Vale was privatized in the 1990s and has dispersed ownership. But the government still exercises significant influence, as its main shareholders include a pension fund managed by state lender Banco do Brasil.
Analysts at Genial Investimentos praised Pimenta’s appointment as he is well-known within the sector and familiar with Vale’s assets and expansion plans. Vale is one of the largest iron ore producers in the world.
“It takes away once and for all the prospect of government being tied to the CEO position,” Genial said. “The decision seems assertive. On the other hand, it also creates doubt about who will replace Pimenta as CFO.”
