Between the positive reaction of the market, with a 3% increase in the stock market, and the frustration of the government, with the critical statements of Lula, Gustavo Pimenta faces the challenge of reorganizing the management of the company
THE Vale Board of Directors Selection for taking the position of CEO of a technical manager who knows the company inside out, he was well received from the market and frustrated the government of President Luiz Inacio Lula da Silvawho had been looking for an ally to lead the company since the beginning of the year. In Sao Paulo Stock Exchange, B3, Vale stock appreciates 3.01%, reaching R$59.80. In the month the stock gains 0.03%; in the year they have accumulated a decline of 16.57%.
Read below the five issues at stake in the mining company with the choice of Gustavo Peppercurrent Vice President of Finance and Investor Relations of the company, will succeed Eduardo Bartolomeo in the role of Executive Chairman, effective January 1, 2025.
Resizing
Head of the financial area, the new CEO of OK, Gustavo Pepperdefended on Monday 26, in a meeting with the company’s board of directors, the improvement of some aspects of the mining company, such as the swelling of the corporate sector, according to the State/Broadcast. Since then the number of the company’s sectors has increased two to three times. Brumadinho Dam Collapsein 2019, a person familiar with the company said. It is understood that creating additional instances was necessary at a critical time, but now requires reassessment.
Lula’s reaction
The President Luiz Inacio Lula da Silva reacted to the choice of the new CEO, a manager from the company’s staff, and not a name suggested by the government, criticizing the OK. He specifies that the company currently has no owner. That said the company is like a “dog with too much master: either it dies of hunger or dies of thirst”. The government was trying to appoint one of its employees. At the beginning of the year, he attempted to install former minister Guido Mantega, but the attempts went behind the scenes and were poorly received by the market.
Repair in Mariana
One of the most complex issues to resolve, and which has been going on for almost ten years, since 5 November 2015, is that of compensation for the families of Mariana (MG) affected by the Samarco Dam Collapseof which Vale holds 50% of the shares. In June, during a trip to Minas Gerais, Lula said that Vale was “swindling” the population. The market awaits the outcome of the renegotiation of this billion-dollar debt in the coming weeks.
Slowdown in China
China’s moderate growth is seen by analysts as a significant challenge for Vale. The Asian country accounts for 50% of global steel demand and 70% of iron ore demand, being one of the company’s main export destinations. The reduction in iron ore prices is also a point of alarm for the company.
License
Vale also faces issues with permits to explore regions where it would have to dismantle natural cavities. Another important issue is its relationship with communities and governments, a person familiar with the discussions said, speaking on condition of anonymity.
Source: Terra
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