DJ Vale SA Shareholders Confirm Murilo Ferreira As New CEO – (Trading – April 4, 2011)

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By Matthew Cowley, Dow Jones Newswires; Diana Kinch in Rio de Janeiro contributed to this article.
SAO PAULO, Apr 04, 2011 (Dow Jones Commodities News via Comtex) — The controlling shareholders of Brazilian mining giant Vale SA on Monday picked Murilo Pinto de Oliveira Ferreira, a former company executive, to replace the outgoing chief executive, Roger Agnelli.

Ferreira will take over May 22, although the appointment needs to be confirmed by Vale’s board of directors, Vale said in a statement.

Ferreira was a surprise choice, and the O Estado de Sao Paulo newspaper said that he was hand picked by President Dilma Rousseff. Ferreira joined Vale in 1998 as head of the firm’s aluminum operations, and left in 2008, when he was president of Vale’s Canadian operations, Vale said.

Speculation in recent days had focused on Tito Martins, who currently heads up Vale’s Canadian business.

The shareholders of Valepar–the holding company which has a majority of Vale’s voting shares–met Monday to choose the replacement for Agnelli, who leaves offices amid reports of a rift with the government.

Valepar, which is basically a joint venture between state and private-sector interests, holds about 53% of Vale’s voting capital. Brazilian government-run pension fund Previ controls Litel, which in turn owns 49% of Valepar, while the government-run development bank, BNDES, owns 11.5%, according to Vale’s website. From the private sector, Bradespar SA owns 21.1% of Valepar, and Japan’s Mitsui & Co. Ltd. owns 18.2%.

While state-owned entities Litel and BNDES together have a majority stake in Valepar, a shareholder agreement means major decisions also require support from at least one of the two private-sector partners, Mitsui and Bradesco.

According to widespread local reports, the government of President Dilma Rousseff has pressured the Bradesco banking group, which also owns Bradespar, to replace Agnelli with an executive more willing to comply with government suggestions on investments. The government has criticized Vale on more than one occasion for not making investments which would speed Brazilian industrial development, including in shipbuilding and steelmaking.

On this theme, Mines & Energy Minister Edison Lobao on Monday said Vale needs to bring its investment policies more in line with Brazil’s national interests, but he also praised Agnelli’s tenure.

“The company needs to contribute more to Brazil’s interests,” said Lobao at an event in Brasilia. The minister cited the need for Vale to add value to the iron ore it mines by producing more steel in Brazil, which it can export in addition to iron ore, the minister said.

Lobao told reporters that he recognized that Agnelli made efforts to increase Vale’s steel investments in Brazil during the 10 years he was at the helm of the world’s largest iron ore producer. In mid-2010, Vale, in conjunction with German steelmaker ThyssenKrupp AG, brought into production a major 5 million-metric-tons-a-year steel mill in Rio de Janeiro state.

Agnelli’s departure from Vale when his mandate finishes should be considered natural considering the length of time he has already spent in the post, the minister said. “There’s nothing abnormal about his departure,” Lobao said.

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