Vale shares rise as markets welcome CEO appointment

By Gabriel Araujo

SAO PAULO (Reuters) - Shares of Vale rose on Tuesday as analysts and investors welcomed the appointment of Gustavo Pimenta as the Brazilian miner's next CEO, starting next year.

Pimenta, Vale's head of finance, was unanimously picked by the company's board of directors to replace outgoing CEO Eduardo Bartolomeo, Vale said late on Monday, wrapping up a noisy succession process that had seen board members depart amid accusations of political influence.

Pimenta, 46, has served as Vale's CFO since 2021 after 12 years as an executive at U.S. energy company AES.

Analysts expect the decision to reduce uncertainty about the miner's strategy and remove an overhang on Vale's stock that has depressed its shares this year.

Sao Paulo-traded shares of Vale were up some 3% by midday, making it the top gainer on Brazil's benchmark stock index Bovespa, which added 0.2%. Year-to-date, Vale was down 16%.

"Pimenta has built a solid reputation with investors and within the mining community," BTG Pactual analysts led by Leonardo Correa said, adding the announcement's timing was a surprise as they expected it to happen by December.

The process was "significantly accelerated as a means of de-risking the equity story, in our opinion," they added in a note to clients. "It is an important victory for Vale's governance and the country too."

Media reports this year said the Brazilian government was seeking to influence the CEO choice. President Luiz Inacio Lula da Silva has repeatedly criticized Vale for two deadly tailing-dam collapses.

Vale was privatized in the 1990s and has a dispersed ownership. But the government still exerts significant influence as its main shareholders include a pension fund operated by state-run lender Banco do Brasil.

Genial Investimentos analysts praised Pimenta's appointment as he is well-known within the sector and familiar with Vale's assets and expansion plans. Vale is one of the world's largest iron ore producers.

"It removes once and for all the prospect of the government being connected to the CEO position," Genial said. "The decision seems assertive. On the other hand, it also creates doubt as to who will replace Pimenta as CFO."

(Reporting by Gabriel Araujo; Editing by Rod Nickel)