Shares of Brazilian mining giant Vale saw a notable rise on Tuesday, rising about 3% by midday, becoming the top performer on Brazil’s benchmark Bovespa stock index. This rally follows the announcement of the appointment of Gustavo Pimenta as Vale’s next CEO, starting next year.
Pimenta, who currently serves as Vale’s Chief Financial Officer (CFO), was unanimously elected by the board of directors to replace Eduardo Bartolomeo, who will leave the position. This decision concludes a controversial succession process that had led to the departure of board members and accusations of political interference.
At 46 years old, Pimenta brings considerable experience to the role, having been CFO of Vale since 2021 and with a career spanning more than a decade at the US energy firm AES. Analysts see his appointment as a positive development for Vale, which will likely ease uncertainty over the company’s strategic direction and improve the performance of its shares, which are down 16% so far this year.
BTG Pactual analysts noted that Pimenta’s reputation and experience were critical to the board’s decision, although they were surprised by the rushed announcement. They described the move as a significant step toward improving Vale’s governance and reducing equity risks.
The appointment also addresses concerns about possible government influence, as recent reports suggested that the Brazilian government was attempting to influence the selection of the CEO. President Luiz Inácio Lula da Silva had criticized Vale for previous environmental disasters.
Genial Investimentos analysts also supported the choice, pointing to Pimenta’s deep knowledge of Vale’s operations and expansion plans. However, they raised questions about who will take over as CFO following Pimenta’s promotion.
