Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
An independent director at Vale has stepped down from its board in protest over the Brazilian miner’s succession process, alleging “nefarious political influence” surrounding the choice of its next chief executive.
The $56bn-valued group, which is one of the world’s biggest iron ore suppliers, has been at the centre of wranglings around its future leadership amid disputed claims of government interference.
Vale announced that José Luciano Duarte Penido was stepping down from its board of directors on Monday evening. In a letter to Vale’s chair, Penido took aim at the alleged “harmful political influence” surrounding the appointment of its next CEO.
“[It has] has been conducted in a manipulated manner, does not serve the best interests of the company,” he claimed in his correspondence first reported by the local media.
Penido argued that a majority had formed on the board “based on the specific interests of some of the shareholders represented there, some with very personal agendas and others with obvious conflicts of interest”, and hit out at “biased leaks to the press”.
The development follows weeks of speculation surrounding the top job at a company that is a force in the global mining industry and considered of strategic national importance to Latin America’s largest economy.
Pressure was exerted earlier in the year by the Brazilian government to appoint a controversial ally of leftwing President Luiz Inácio Lula da Silva, according to people aware of the situation.
The energy and mines minister subsequently denied media reports that the administration had sought to intervene in Vale’s choice of a chief executive or that Lula had discussed the matter.
Vale said last week it would extend the mandate of sitting chief Eduardo Bartolomeo, whose term was due to expire in May, until the end of the year as it searches for a replacement.
Officially, Brasília has limited direct influence over Vale, although it has special golden shares that grant veto rights following privatisation in 1997. This allows the state to block a change to the company’s name, relocation of its headquarters or the sale of certain assets.
Brasília also has some sway over Previ, the pension fund of state-controlled Banco do Brasil, which is Vale’s biggest individual shareholder with two seats on the board.
Lula has fired broadsides against Vale lately, saying it could not have a “monopoly” and criticising it for supposedly inadequate actions to redress the consequences of mining disasters in the past decade.
Vale’s shares in Brazil have fallen almost a fifth since the start of the year following a sharp slide in iron ore prices.
The boardroom drama at Vale comes as the Brazilian miner faces a potential legal bill after Samarco, its joint venture with BHP, was ordered to pay almost $10bn by a local court for a catastrophic dam collapse in 2015 and its base metals unit undergoes an asset review.
Mark Cutifani, chair of Vale Base Metals, which is headquartered in Canada, told the Financial Times prior to Penido’s resignation that it was important to have the best qualified person for the role in any job appointment and “one never likes to see political involvement in these kinds of things”.
However, the former head of Anglo American also stressed: “There’s no indication that there won’t be an appropriate process to find a successor.”
Vale declined to comment and Brazil’s presidency did not immediately respond to a request for comment.
