Shares of Brazilian mining giant Vale saw a notable rise on Tuesday, with the company’s stock increasing by approximately 3% by midday, making it the top performer on Brazil’s benchmark stock index, Bovespa. This uptick follows the announcement of Gustavo Pimenta’s appointment as Vale’s next CEO, effective next year.
Pimenta, currently serving as Vale’s Chief Financial Officer (CFO), was unanimously selected by the board to succeed Eduardo Bartolomeo, who is stepping down. This decision concludes a contentious succession process that had led to board member departures and accusations of political interference.
At 46, Pimenta brings substantial experience to the role, having been Vale’s CFO since 2021 and previously holding executive positions at U.S. energy firm AES for over a decade. Analysts view his appointment as a positive development for Vale, likely to alleviate uncertainty surrounding the company’s strategic direction and improve its stock performance, which has been down 16% year-to-date.
BTG Pactual analysts highlighted that Pimenta’s reputation and expertise were pivotal in the board’s decision, although they were surprised by the accelerated announcement. They described the move as a significant step towards enhancing Vale’s governance and reducing equity risks.
The appointment also addresses concerns about potential government influence, as recent reports suggested the Brazilian government was attempting to sway the CEO selection. President Luiz Inacio Lula da Silva had criticized Vale for past environmental disasters.
Genial Investimentos analysts also endorsed the choice, noting 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.
