The company was commissioned to prepare an x-ray of Eduardo Bartolomeo in office; in recent months he has intensified his participation in events with the authorities
RIO – The Board of Directors of OK has until January 26 to decide on the reappointment or replacement of the company’s current CEO, Eduardo Bartolomeo. OR Station/Broadcast People familiar with the process have learned that, in addition to the executive branch’s technical performance, the resourcefulness of the federal and state governments will be addressed in rounds of consultant conversations, expected in the coming weeks.
To support the decision, the municipality commissioned a company to prepare an x-ray of Bartolomeo. As part of this stage, directors will be asked about the CEO. The observations should help inform management over the next three years. If the executive were reappointed, the board would be expected to seek a larger role in the company’s day-to-day operations, according to people close to the company.
According to part of the council, Vale needs to improve traffic in Brasilia and the state governments where it operates, to speed up obtaining licenses, secure concessions, dissolve trials and be heard on legislation. At the same time, these shareholder representatives are careful to prevent politics from entering the company, as has happened in the past.
According to the mining company’s rules, the succession process must begin between 6 and 4 months before the end of the president’s term, which ends at the end of May. If Bartolomeo is not reappointed, a specialized consultancy firm will prepare a triple list so that the board can choose another manager.
An engineer by training, Eduardo Bartolomeo assumed the presidency of Vale in 2019, after the Brumadinho disaster, considered the worst moment for the company, shaken by the deaths of 272 people. In exclusive interview with Station/Broadcast earlier this month, said he would like to stay in his position and complete the projects he has developed and which are beginning to bear fruit. “I wouldn’t want to leave now, with an incomplete project.”
Progress in safety – including the upstream dam decharacterization programme, a sensitive topic after the 2019 tragedy – and robust dividend payouts are points in Bartolomeo’s favour. Since 2020, the company has delivered $29 billion to shareholders. Furthermore, the CEO led the restructuring of the mining company, with the creation of the promising base metals unit, VBM, and the sale of assets that were not part of the core business, such as the stake in steel mills.
“He has rebuilt Vale, a high-quality administrative project,” said a person connected to the company, citing advancement in the cluster niche, which provides greater added value to the company’s sales.
On the other hand, the mining company has not yet managed to significantly increase production volumes, with consequences on operating costs, which are considered high. To turn the situation around, Vale needs to speed up licensing, which requires a dose of goodwill from US public authorities. “The productive dialogue to expand production would be beneficial for everyone, since the export of mineral brings resources and has a weight in the trade balance, together with agri-food and oil,” stressed a person linked to the company.
Action and results
Bartolomeo is considered a man of action and results, but little attentive to diplomacy. In recent months, however, he has shown a willingness to work alongside the government. In an atmosphere of cordiality, he participated in an event in Rio, in November, together with Aloizio Mercadante, president of the BNDES, and Jean Paul Prates, president of Petrobras. In September Vale had signed a memorandum of understanding with the oil company for low-carbon solutions, in a two-year partnership.
A few weeks ago, the executive joined Jorge Viana, president of Apex (Brazilian Export and Investment Promotion Agency), on a mission to the Middle East. On that occasion he met the Minister of Civil Housing, Rui Costa. In September he had a meeting with the Minister of Finance, Fernando Haddad.
“He is loosening up, building bridges and demonstrating that he has the ability to maintain good relations with public authorities,” one adviser said on condition of anonymity. “Government is always important in complex areas of economic activity.”
A sin of the executive, in Lula’s eyes, would have been the appointment, as director of regulatory affairs, of Marcelo Sampaio, Tarcísio de Freitas’ former number two, Bolsonaro’s Minister of Infrastructure and current governor of São Paulo. Sampaio is the son-in-law of General Ramos, minister of the General Secretariat of the Bolsonaro Presidency.
Furthermore, according to those who know Vale’s daily operations well, Planalto would be more satisfied if the mining giant sought, in its projects, greater alignment with “the public interest”, designing, for example, railways that favor the flow of passengers .
According to the report, the good disposition of the federal government would help untie the knot of the renegotiation of the agreement on the 2015 Mariana tragedy. Station/Broadcast. At the time, a dam in Samarco (which belongs to Vale and BHP) collapsed causing the death of 19 people and an environmental disaster.
Recently, in a meeting with analysts and investors, Bartolomeo said that Vale wants to reach a settlement in the Mariana case similar to the one reached in the Brumadinho case. A legal agreement for full reparation was signed in 2021, totaling R$37.7 billion. In the case of Mariana, negotiations drag on, bringing legal uncertainty, with public authorities insisting on R$126 billion to close the deal. A political decision, according to observers, could help untie the knot.
Shielding
Since mid-year, rumors about the federal government’s intention to interfere in the succession process have influenced the debate on the topic. President Lula reportedly intends to put former Finance Minister Guido Mantega in the presidency of Vale. The name was not well received by the market and even less the sign of interference.
In August, Citi assessed a change in the mining company’s CEO as “very unlikely.” “The Brazilian government is an important stakeholder of Vale, together with employees, communities, shareholders, but, according to Vale’s statute, the choice of the CEO is up to the Board of Directors (Article 14),” analysts recalled of the bank.
“The board should be convinced that a change would be beneficial to the company. The current board has a strong presence of independent members representing a diverse shareholder base.”
This situation would have demonstrated to the President of the Republic that things are no longer as they were in 2011, when the PT deputy influenced the departure of Roger Agnelli from the command of Vale. Since 2017, when the mining company became a “corporation,” as companies without defined control are called, Vale has taken a series of measures to avoid political interference in its operations. And, in 2021, BNDESPar, the holding arm of BNDES, completed the sale of the Vale shares it still held. “Decisions are now being made under the new governance,” stressed a person connected to the company.
Vale’s Board of Directors is made up of 13 directors, of which 8 are independent. Of these, three are foreigners, with experience in the mining sector. They are expected to make “technical” rather than political evaluations. There is also a foreigner linked to the second individual shareholder, the Japanese conglomerate Mitsui, which holds 6.31% of the company’s capital.
Vale’s largest individual shareholder, with 8.71%, is Previ, a pension fund for Banco do Brasil employees, which is expected to lead the opposition to Bartolomeo, according to those following the discussions. The charity has made two appointments to the board, and its ability to influence other councilors will be crucial to Bartolomeo’s future at Vale.
New names
While consultants observe the panorama, names of well-known executives enter the field of speculation. One of these is that of Luis Henrique Guimarães, director of Vale and former CEO of Cosan, owned by the entrepreneur Rubens Ometto, who holds a 4.9% stake in the capital of the mining company. Another is that of Walter Schalka, CEO of Suzano. Eduardo Parente, president of the Yduqs educational group, was also remembered in behind-the-scenes conversations.
None of them, however, are known for their ties to Brasilia.
The name of Paulo Rogério Caffarilli, former CEO of Cielo and Banco do Brasil, now head of the financial holding Simpar, was also mentioned. The executive had experience in the public sector: he was executive secretary of the Ministry of Finance from 2014 to 2015, under Dilma Rousseff.
Source: Terra
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