MercoPress. South Atlantic News Agency

Brazil’s Vale yields to government pressure names new CEO

Murilo Pinto de Oliveira Ferreira, the new CEO of the world’s largest iron ore producer (Getty Images)

Brazilian mining giant Vale, the world's biggest producer of iron ore, has chosen a new chief executive. Former Vale executive Murilo Ferreira will return to the company on 22 May.

Mr Ferreira, 58, replaces Roger Agnelli, who has been under pressure to go following months of friction with the government. Mr Agnelli was criticised for not investing enough in Brazil's economy, but his supporters said the move was a veiled state takeover.

“Interference by the government could mar the image of the country as a promising place for investment,” said Brazil's mining association, Ibram, in a statement posted on its website.

For years Mr Agnelli enjoyed the support of former President Lula da Silva as he built Vale into a global powerhouse. But Mr Lula da Silva harshly criticised his move to cut investments and lay off workers during the financial crisis.

The government owns a large stake in Vale through the state-run pension fund and development bank.

Mr Ferreira joined Vale in 1998 in its aluminium division and later led the Canadian nickel operations that the company bought in 2006. He left the company in 2008 after 30 years in the mining business.

Analysts said Mr Ferreira's two immediate tasks would be to mend fences with the government and to ensure that ties with China - the world's largest iron ore buyer - are not damaged.

The release from the Vale S.A. says that after the meeting held today (Monday), the controlling shareholders of Valepar - Litel, Bradespar, BNDESpar, Mitsui and Elétron - communicated to Vale the nomination of Murilo Pinto de Oliveira Ferreira to succeed Roger Agnelli as Vale's Chief Executive Officer (CEO), starting on May 22, 2011, after the end of the mandate of Mr. Agnelli. The nomination is subject to approval of Vale's Board of Directors, in a meeting yet to be announced.

Murilo Ferreira, 58 years old, has a degree in Business Administration from Fundação Getúlio Vargas (FGV) in São Paulo, a post-graduate degree in Business Administration from FGV in Rio de Janeiro, and an executive education program in M&A at the IMD, Lausanne, Switzerland. Murilo has more than 30 years of experience in the mining industry. He begun to work for Vale in 1998 as Director of Vale do Rio Doce Alumínio - Aluvale, acting in several senior management positions until his leave in 2008, when he was Chief Executive Officer of Vale Inco (currently Vale Canada) and Executive Director of Nickel and Base Metals Sales of Vale.

Murilo Ferreira was nominated by the controlling shareholders of Vale among a list of three candidates recommended by an international executive search company, according to the rules and bylaws of Valepar, the controlling shareholder of Vale. Consistent with the best corporate governance practices, there will be a transition period, from our current CEO, Roger Agnelli, to its successor, to ensure the continuity of the operations and strategy implementation of Vale.

The shareholders of Valepar take the opportunity to reiterate its appreciation of Roger Agnelli for his successful performance as CEO of Vale during the last few years, contributing to reach the prominent position Vale enjoys today around the world.