Building the world’s next major iron-ore hub has Vale SA investors applauding the prospect of higher earnings and a group of scorned politicians plotting to oust the company’s leader.
Chief Executive Officer Murilo Ferreira is overseeing the Brazilian mining giant’s shift away from its home state of Minas Gerais and toward new deposits in the north. The change has culminated in a $14 billion mining complex in an area where ore quality is higher and costs will be lower. It’s also left behind a region that’s seen spending and job opportunities steadily decline over the last four years, spurring bitter feelings along the way.
“The direction of the company could have been better handled,” Minas Gerais Congressman Newton Cardoso Jr., whose father was a state governor, said in an interview. “Vale needs a CEO that focuses on environmental issues and that respects Minas Gerais’s investment priorities and job-generation needs.”
While local opposition like that would normally be of little consequence for an independently run company, Vale is controlled by a holding company whose owners include state pension funds and a development bank. And the changes come at a time when the new government is suffering from a recession and looking to distance itself from authorities and executives with perceived allegiances to the previous administration.
Ferreira took the CEO job in 2011 as part of a management shakeup driven by then President Dilma Rousseff. Since then, the company has been on a roller coaster ride of sorts.
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