Gustavo Pimenta becomes new CEO of Vale: Analysts welcome appointment

Vale's shares responded with a significant increase after it was announced that Gustavo Pimenta will assume the position of CEO starting next year. The decision was made unanimously by the board of directors of the Brazilian mining company, thus ending a turbulent succession process that had been marked by political interference in recent months. Pimenta, currently the CFO of the company, will succeed Eduardo Bartolomeo. He has been with Vale since 2021, having previously spent 12 years as a manager at the US energy company AES. Analysts expect the appointment to reduce uncertainty about the company’s future strategy and have a stabilizing effect on Vale's shares, which have been under considerable pressure this year. Vale's shares traded in Sao Paulo rose by around 3% by midday, leading the gainers on the Brazilian benchmark index Bovespa, which increased by 0.2%. However, since the beginning of the year, the stock has recorded a decline of 16%. Analysts from BTG Pactual, led by Leonardo Correa, described Pimenta as a recognized professional with a good reputation among both investors and within the mining industry. They were surprised by the timing of the announcement and interpreted the early appointment as a means of risk mitigation. Reports of political interference had led to uncertainties, particularly regarding statements from President Luiz Inacio Lula da Silva, who had sharply criticized the company due to two fatal dam failures. Although Vale was privatized in the 1990s and has a widely dispersed ownership structure, the government still influences the company through major shareholders such as the state pension fund of Banco do Brasil. Analysts from Genial Investimentos praised Pimenta’s selection, noting that he is well-known in the mining sector and familiar with Vale's assets and expansion plans. They also emphasized that the appointment reduces concerns about government interference but warned that the question of who will succeed Pimenta as CFO remains open.