Twitter

Vale

Not another wimp out [Comparisons to Brazilian Takeover of Inco] – by Martin Goldfarb (Toronto Star-April 18, 2011)

The Toronto Star, which is the largest circulation newspaper in the country, has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion.

Martin Goldfarb is principal at Goldfarb Intelligence Marketing and was official Liberal party pollster from 1972 to 1984.

Inco is an example worth remembering. At one point Inco was
a global leader, dominating a mining category. It was the soul
of the city of Sudbury and added stature to Ontario. It produced
intellectual property in the mining industry that was second to
none and respected globally. It provided work to miners, engineers, lawyers, bankers and others. So much of this was lost. The intellectual property and pride that Inco brought to Canada,
Ontario and Sudbury are all but gone. What happened? Management ceased to lead. In so doing it became vulnerable to takeover. (Martin Goldfarb-April 18, 2011)

Australia said No to Singapore. Australia decided its stock exchange is not for sale. Now we in Canada are thinking about whether or not the Toronto Stock Exchange (TSX) should be taken over by the London Stock Exchange (LSE).

A country is more than a business. There are totems in our country that define our personality, help create our character and engender pride, independence and a sense of our own charisma. Some arise from our geography (the Rockies, the Arctic), some from our natural resources (oil, water, lumber, maple syrup) and some from government (national health care). All help give us a sense of who we are.

But there are other totems in Canada that are not a function of our geography, our geology or our government. These are institutions created by the citizens of our country in business and academia — our universities and our internationally recognized businesses, such as RIM today, and in the past, Inco and Falconbridge. Inco and Falconbridge have disappeared but should never have been allowed to do so. A dose of economic nationalism is good for our soul. In some circumstances, profit should be second to the national interest. National interests help define who we are.

Read more

A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 3 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

Discussion

Reputation

Public perception of Vale has changed dramatically since 2006. There is mistrust and suspicion surrounding the company’s motives and future plans for the Sudbury operations. Actions and decisions made during the 11 month strike have tarnished Vale’s reputation not only in the Sudbury area, but province-wide, and possibly internationally. Unions from across the world weighed in on the labor dispute. In January 2010, the trade magazine Metal Bulletin described Vale’s hard line as an attempt to break the union.

Reputation matters. Reputation impacts a wide variety of areas: consumer purchasing decisions, employee recruitment and retention, investment decisions, even how media covers your news [40]. From an outsider’s point of view, Vale does not seem very concerned with its reputation, choosing to place profits ahead of its people.

USWA Local 6500 also needs to rebuild and revamp its reputation. Given the lack of community support received during the strike, the actions of certain members, and the harsh and hateful words spoken during the dispute, the union has a long road ahead of it if it is to restore its reputation to where it was prior to the strike.

Read more

A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 2 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

USWA Local 6500

The executive of USWA Local 6500 anticipated difficult negotiations from the start. This was a new company and the negotiating team did not know what to expect. The only thing that was clear was that there would be no concessions on the part of the union.

Talks collapsed mere weeks after they began and the gloves came off shortly thereafter with both sides blaming the other for the impasse [23]. It was at this time that the USWA Local 6500 first alleged that the root cause of the problem was a lack of understanding by Vale’s Brazilian owners as to North American culture, along with a desire to trample workers’ rights and reduce their compensation package [23].

As the months wore on, the USWA Local 6500 web page featured alleged replacement workers, providing names and addresses as well as photos of the individuals. Anonymous members posted that there should be retaliation toward these so-called “scabs”. This resulted in a flurry of threats, assaults and damage to property throughout the community. In May 2010, Vale fired nine strikers for purported violations of its code of conduct on the picket line. There were also criminal charges laid against some of the nine strikers for other offences related to the strike. The matter is still before the Ontario Labor Relations Board and the courts.

Read more

A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 1 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

Final Case Study

Abstract

In July 2009, USWA Local 6500, the union representing the employees of Vale’s Sudbury operations went on strike. This was to become the longest and most acrimonious strike in Sudbury mining history. Both sides in the dispute were responsible for less than flattering behavior, including leaking of documents, bullying, making racist comments, and even criminal activity. The final result of this strike is a community that has lost respect for both organizations.

This case study offers an opportunity to study how actions taken during a strike impact on the reputation of both parties. It also highlights the communication breakdown between not only both parties but also with their key stakeholders.

Overview

“We are very happy with the results of the ratification vote. The agreement establishes a newworking relationship with our employees and the union and allows us to move forward with our long-term, sustainable growth plans. We look forward to returning to normal production andbuilding the future together with employees.”

Tito Martins, Vale’s Executive Director for Base Metals
Vale news release, July 9, 2010 [1]

Read more

[Murilo] Ferreira tapped to replace [Vale CEO Roger] Agnelli – by Harold Carmichael (Sudbury Star/Reuters-April 6, 2011)

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This column was published on April 6, 2011.

The new boss of Vale is no stranger to Greater Sudbury. Murilo Ferreira visited the city several times after the Companhia Vale do Rio Doce SA — now Vale — bought Inco in 2006.

In fact, Ferreira was chief executive officer of Vale Inco when he left Vale in 2008. He is returning to Brazil-based Vale, where he will replace Roger Agnelli as CEO next month. During his 2007 visit to Sudbury, Ferreira announced a $400-million investment in the company’s operations here, including work on Totten Mine.

“As I look to the future, there is again a simple word about our vision: growth,” Ferreira told more than 50 community leaders at a luncheon at Science North. “We are growing at CVRD. We are growing at CVRD Inco. And we are growing right here in Sudbury … This is an exhilarating moment for us on a number of levels.

Read more

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

Trading Charts.com is the source for free quotes & charts – over 30,000 stock market, forex & commodity futures price charts & quotations following nearly every North American (and many international) stocks and futures contract.

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.

Read more

Vale takeover fell short – by Laura Stricker (Sudbury Star-April 2, 2011)

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. This column was published on April 2, 2011. lstricker@thesudburystar.com

ELECTION: NDP leader in a whirlwind tour of Sudbury on Friday 

“(One key issue) was on the whole question of foreign ownership … I think the bar
could have been set much higher with regard to what (Vale) was required to do to
benefit the people here — the workers and the community.” (Jack Layton – NDP Leader)

Foreign ownership should be handled in an open and transparent manner, Jack Layton said Friday, citing Vale’s takeover of Inco in 2006.

Layton stopped by The Star office Friday with Nickel Belt MP Claude Gravelle and Sudbury MP Glenn Thibeault. He praised the two men for their success in bringing issues important to Sudburians, including the takeover, to prominence in the House of Commons.

“Our MPs from Northern Ontario, and particularly these two, have really driven some of the key issues that are of concern in this community,” Layton said.

“(One key issue) was on the whole question of foreign ownership … I think the bar could have been set much higher with regard to what (Vale) was required to do to benefit the people here — the workers and the community,” he said.

Read more

Vale confirms CEO Agnelli’s exit – by Brenda Bouw (Globe and Mail-April 2, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Brenda Bouw is the paper’s mining reporter.

The ouster of Roger Agnelli as chief executive officer of Brazilian mining giant Vale SA signals a tightening government grip on the country’s resource sector and heightens concerns over rising political risk in Latin America’s largest economy.

Rio de Janeiro-based Vale confirmed a search is under way to replace Mr. Agnelli, who has held the top job at the world’s largest iron ore producer for the past decade.

Vale said its controlling shareholder Valepar, majority held by the Brazilian government, hired a headhunting firm to find a replacement for Mr. Agnelli, 51, when his mandate ends in May. Valepar will hold shareholder meetings next week to nominate a new CEO from a list of three candidates, Vale said.

Toronto-based metals executive director Tito Botelho Martins, 47, is seen as the leading candidate to replace Mr. Agnelli.

Read more

Vale’s man in Canada [Tito Martins] touted as new chief in Brazil – Andy Hoffman (Globe and Mail-March 31, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Andy Hoffman is the paper’s Asia-Pacific Reporter.

Tito Botelho Martins has endured a string of long and difficult winters in Canada. Now he’s in line for a triumphant return to sunny Rio de Janeiro.

The Toronto-based executive is being touted as the leading candidate to replace Roger Agnelli as the chief executive officer of Brazil’s Vale SA (VALE-N32.92-0.05-0.15%), the world’s top iron ore producer and one of the biggest mining companies on the planet.

Mr. Agnelli, the flashy former investment banker who has steered an aggressive decade-long expansion of Vale’s international operations, has fallen out of favour with Brazil’s government over corporate strategy. Unhappy with Mr. Agnelli’s perceived failure to invest enough in Brazilian mining and steel projects, Brazil’s President Dilma Rousseff is understood to be using the government’s leverage as a key shareholder of Vale (through state pension funds), to force Mr. Agnelli to step aside.

Newspaper Folha de S.Paulo reported that Mr. Martins, who was parachuted in to run Vale’s nickel and copper mining business from Toronto in early 2009, will be named Vale’s new CEO.

Read more

Vale shuffle rumoured [Tito Martin likely new CEO]- by Carol Mulligan (Sudbury Star-March 31, 2011)

Carol Mulligan is a reporter for the Sudbury Star, the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

Speculation is rampant this week that Tito Botelho Martins is the man most likely to become the next chief executive officer of Vale. Martins, currently executive director for Base Metals for Vale and CEO for Vale Canada, works out of Toronto for the Brazil-based Vale.

A Brazilian n ews p a p e r was quoting two sources Wednesday who said Martins, 47, has a good chance of being named to the top job that has been held for years by Roger Agnelli. Cory McPhee, Vale Canada’s vice-president of corporate affairs, would only offer a no-comment Wednesday about the rumour.

“We are not commenting on the speculation around executive moves,” McPhee said in an e-mail to The Sudbury Star. Two high-ranking officials with United Steelworkers in Canada have been following the news about Martins with interest.

Read more

Report pegs Vale director [Tito] Martins to be new CEO (Globe and Mail – March 30, 2011)

“Tito Martins is a Vale man, heart and soul; he understands the company.” (Marcio Macedo, a partner with Humaita Investimentos – Sao Paulo)

SAO PAULO – Reuters

Vale SA director Tito Botelho Martins will be named the company’s new chief executive officer, a local newspaper reported Wednesday, the latest chapter in an ongoing tussle over the leadership of the world’s largest producer of iron ore.

Newspaper Folha de S.Paulo reported that Brazilian bank Bradesco, a key Vale shareholder, backed Mr. Martins to replace current CEO Roger Agnelli. Folha, which did not say where it obtained the information, said Bradesco would announce its decision by Friday.

Mr. Martins’ designation would likely hearten investors following concerns the government would tap an inexperienced politician who would slow the company’s profit growth.

“Tito Martins is a Vale man, heart and soul; he understands the company,” said Marcio Macedo, a partner with Humaita Investimentos in Sao Paulo, which manages close to $37-million (U.S.) in assets and owns Vale shares. “Right now, Vale shares are very, very cheap. If he is confirmed, I think we could see some relief for the shares.”

Read more

[Roger Agnelli, Vale] Brazil’s Behemoth – by Ken Stier (Time Magazine-February 21, 2008)

Few companies offer a more stunning testimonial to the benefits of privatization–and fortuitous timing–than the formerly state-owned Brazilian mining firm Companhia Vale do Rio Doce. In the 55 years following its founding in 1942, Vale, as it is now known, grew into a comfortably large domestic player. Since being unshackled from Brazil’s state bureaucracy in 1997, Vale has soared into the ranks of global-commodities powerhouses, with net income rising from $680 million in 2002 to $9.2 billion in the first nine months of 2007, placing it as one of the top-three diversified mining and metals firms in the world. The industry has become blast-furnace hot: witness BHP Billiton’s hostile $147.4 billion bid for iron-ore-rich Rio Tinto Group.

Already the world’s largest producer of iron ore and one of the largest producers of nickel, Vale is also a growing force in copper, manganese, bauxite, precious metals, aluminum, coal, steel and energy. Its stock price has more than doubled in the past year, to nearly $33, and the company’s market value is about $160 billion, 16 times what it was in 1997. Douglas B. Silver, an industry veteran and CEO of Colorado-based International Royalty Corp., calls Vale “the most effective giant mining company in the world,” not just for its size but also for its skill at operating in difficult emerging markets. Along the way, Vale has built what could be a model for other formerly state-run enterprises hoping to make a mark on the world stage.

Roger Agnelli, a 48-year-old investment banker, became CEO in 2001. He inherited a company whose historic strength lay deep in the Amazon, in the massive iron-ore deposits of Carajas. Iron ore then accounted for 75% of Vale’s revenues, and Agnelli’s first move was to consolidate domestically, by selling off peripheral holdings in paper and forestry (Agnelli’s family business) and using the proceeds to swallow eight rival firms.

Read more

Vale/Roger Agnelli upheaval: One more thing for nickel miners to worry about – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Rumours are swirling this week that Vale SA CEO Roger Agnelli is being forced out of his job. Evidently the Brazilian government seeks greater control over the company saying Agnelli has not aligned the company with “national interests” despite record profits.

Ordinarily, putting a government agenda ahead of good corporate management would herald a sharp downturn in a company’s share value. Anything that hints of government interference – be it nationalization, government resource ownership or excessive taxes and royalties – usually scares off investors very quickly. Vale will be lucky to avoid this sort of disaster.

Vale’s public image in Canada has been deeply tarnished by a pair of strikes – one lasting a year in Sudbury and the other lasting 14 months in Labrador. Despite promising to spend $10 billion over five at its Canadian operations, the company is still viewed with distrust by many people.

Adding greater Brazilian government influence over the company will do nothing to endear Vale to residents of Sudbury or anywhere else in Canada.

Read more

[Roger Agnelli] Brazil pressures Vale to invest inward – by Peter Koven (National Post-March 29, 2011)

The National Post is Canada’s second largest national paper. This article was originally published in the Financial Post on March 29, 2011. pkoven@nationalpost.com

TORONTO — In Brazil, politics appear to be trumping profits. President Dilma Rousseff’s government is working hard to force the chief executive of mining giant Vale SA out of his job. Despite Vale’s tremendous success in recent years, the government wants the company to change its investment focus in order to boost Brazil’s economy.

As CEO, Roger Agnelli played a key role in transforming Vale into a global powerhouse from its humble roots as a state-owned company, making it a huge winner for investors in the process. The company earned a net profit of US$17.3-billion last year, and sports a market value of almost US$170-billion.

A change at the top could have huge implications in the global mining industry. If Vale is forced to look inward in Brazil, it leaves a question mark over its international assets, including all the Canadian ones it acquired when it bought Inco Ltd. for about $19-billion.

Read more

[Roger Agnelli] Brazil and Vale, At a Crossroads – by Stuart Burns (Metal Miner-March 29, 2011)

MetalMiner blog provides unique insight, analysis, and tools for buyers, purchasing professionals, and everyone else for whom metals and their related markets matter.

Stuart Burns

We have written on several aspects of business and the metals markets in Brazil recently; the latest just last week about Gerdau Steel raising billions in a share sale with the probable intent of bidding for one or more of its major domestic competitors. Generally that is taken as a positive sign; although to invest in new facilities for organic growth rather than acquisition would be better, at least buying competitors is a vote of confidence in the economy’s future.

So what should we make of the spat developing between the government of new president Dilma Rousseff and Vale, reported in an FT blog article? Apparently, Vale’s high-profile chief executive Roger Agnelli’s contract is coming up for renewal in May and the government is making every effort to prevent his re-appointment. Although Vale was privatized in 1997, the firm is Brazil’s largest exporter and along with Petrobras, the national oil company, a major source of foreign exchange and tax revenue. Vale tripled profits last year to $17 billion on the back of some $47 billion in revenues according to an FT article this week.

Read more