Brazilian mining giant Vale on Monday named a new chief executive under withering government pressure, a move that may spark fears of state meddling in Brazil's private sector, but is not expected to dent investor confidence in the firm.
Former Vale executive Murilo Ferreira will have to placate politicians' desires for more investment in infrastructure and steel mills, while giving the massive returns provided by outgoing CEO Roger Agnelli during his ten years in office.
Mr. Agnelli, who helped turn Vale into the world's largest iron ore miner, will leave the post by May 22 after years of criticism by political leaders that he was not doing enough to spur Brazil's economic development.
"Murilo Ferreira was indicated by the controlling shareholders from a list of three prepared by an international executive search firm," Vale said in a statement.
"The shareholders ... reiterate their recognition of Roger Agnelli for his success in the leadership of Vale in these years."
Vale's board will still have to approve the appointment, the company said.
The designation of an experienced industry hand rather than a politician with a heavy social agenda will likely be seen as good news by shareholders. Investors are keen on Vale's extensive iron and nickel assets, low operating costs, and strong presence in China.
The move by President Dilma Rousseff to push for Mr. Agnelli's ouster has sparked concerns of increased government involvement in Brazil's private sector, and could tarnish her image as a pragmatic leader who can work side-by-side with business.Report Typo/Error
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