Vale shake-up over direction

By Samantha Pearson in Rio de Janeiro (The Financial Times).

Vale, the world’s biggest miner of iron ore by volume, replaced its chief financial officer as part of a major management reshuffle. Murilo Ferreira, the head of the mining company, presented a proposal to the board on last Thursday putting forward Tito Martins, the head of base metals, as the new chief financial officer and suggesting the replacement of other top executives.
Despite privatising the company over a decade ago, the government has recently sought to align Vale more closely with national interests by encouraging the miner to develop Brazil’s steel and shipbuilding industries.
The replacement of Mr Agnelli by Mr Ferreira came as a relief to many, and six senior managers left the company after the appointment, putting further some pressure on the shares.
In the latest reshuffle, announced late on Monday night, Vale said it would remove from its executive board the current director for finance and investor relations, Guilherme Calvalcanti, the head of fertilisers, Mario Barbosa, and its director of exploration, energy and projects, Eduardo Ledsham. However, it declined to comment about whether the men would remain at the company in different roles.
Vale also said it would ditch some executive positions and share out the responsibility for planning, new business development, operations, marketing and sales.
“This model will help us reach our growth goals and consolidate our business, with the aim of further strengthening the company,” the Rio de Janeiro-based miner said.
Despite the drastic management overhaul, the promotion to CFO of Mr Martins, a company veteran and previously the favourite for Mr Agnelli’s job, is likely to calm investors’ nerves, analysts said.
“He’s well thought of and a very competent guy,” said Pedro Galdi, an analyst at SLW Corretora in São Paulo.
Mr Martins won the respect of many of his colleagues for his role in the acquisition of Toronto-based Inco, a large miner of nickel.
In spite of the sharp slowdown in the domestic economy, Vale has continued to pursue new mining projects.
On Tuesday, the company said its board had approved a $6bn expansion of its Moatize coal project in Mozambique. The investment is expected to boost the plant’s production to 22m tonnes a year as the company looks to Africa for fresh resources.