Brazil's mining chief says Lula never tried to weigh in on Vale succession

29th January 2024 By: Reuters

Brazil's mining chief says Lula never tried to weigh in on Vale succession

Brazilian President Luiz Inacio Lula da Silva

SAO PAULO - Brazilian President Luiz Inacio Lula da Silva has not sought to influence who will be chief executive of major mining company Vale, a senior official said on Friday, after recent reports suggesting otherwise caused the firm's shares to tumble.

Vale, one of the world's largest producers of iron-ore and nickel, was privatised in the 1990s but the government still exerts significant influence as its main shareholders include a pension fund operated by state-run lender Banco do Brasil.

But in comments to reporters, Mines and Energy Minister Alexandre Silveira batted down the possibility that the country's leftist president, known as Lula, might interfere in the miner's corporate governance.

"Lula would never be willing to interfere directly in a publicly traded company that's listed on the stock exchange," he said.

The minister's comments contradict media reports from the past few weeks, including from Reuters, that Lula engaged in discussions about who would be the next chief executive of Vale.

Reuters reported that Lula wanted a former finance minister, Guido Mantega, to be appointed to the company's board or even as its CEO.

Newspaper Folha de Sao Paulo reported earlier on Friday that Mantega would announce he is dropping out of consideration for a potential role at Vale.

Mantega could not be immediately reached for comment.

Vale's Sao Paulo-shares extended gains on Friday afternoon after Folha's report, closing the trading day up 1.7%.

But the shares are down 10% this month, in part weighed down by a court ruling ordering Vale and two partners to pay nearly $10 billion in damages for a tailings dam failure in 2015.

The term of current Vale CEO Eduardo Bartolomeo expires in May, and board members could opt to extend it or replace him.

In his comments, Silveira also denied any personal involvement in a government recommendation about who should sit on Vale's board, though he expressed criticism about the firm's current management.

Vale did not immediately respond to requests for comments on Silveira's remarks.