Vale seeks to regain iron ore lead after safety, governance overhaul

Vale highlights shareholder gains, growth ambitions for coming years

“We have been working to show [investors] that the company has undergone a profound transformation in managing dams, risk, and safety,” Mr. Pimenta told Valor. He was in Carajás, Pará, where Vale’s main operations are located, attending the startup of the second furnace at the Onça Puma nickel producer in Ourilândia do Norte.

Over the past 12 months at the helm, Mr. Pimenta has committed to other investments: the completed nickel expansion at Voisey’s Bay in Canada, and three projects that expand iron ore production capacity in Pará (the so-called +20), and in Vargem Grande and Capanema, both in Minas Gerais.

Vale is thus maintaining its target of producing between 325 million and 335 million tonnes of iron ore this year, compared with 328 million tonnes in 2024. According to Mr. Pimenta, the company is meeting 100% of its targets across different products (iron ore, nickel, and copper), a result of greater operational stability.

For years, investors had criticized Vale for failing to meet production goals, while uncertainties lingered over dam safety after the Brumadinho (2019) and Mariana (2015) disasters—this will mark its tenth anniversary on November 5. Early in Mr. Pimenta’s tenure, Vale reached a global settlement for Mariana.

He also noted that, a month ago, the company achieved another milestone: it no longer has any tailings dams at level 3, the highest emergency classification under the National Mining Agency (ANM).

The gradual reduction of operational risks has improved market perception of the company, said Mr. Pimenta, who served as Vale’s CFO before becoming CEO. In September, S&P Global Ratings upgraded Vale’s global credit rating from “BBB-” to “BBB,” with a stable outlook. The company also saw improvements in its ESG ratings from Sustainalytics and MSCI.

These advances, according to Mr. Pimenta, allow Vale to broaden its shareholder base. Following the Brumadinho disaster, several international investors excluded the Brazilian miner from their portfolios. Some funds were barred from investing in the company. Now, he said, major asset managers overseeing nearly $1 trillion have regained confidence in investing in Vale.

A survey by Valor Data shows that between September 30 of last year—just before Mr. Pimenta’s appointment—and Tuesday (30), Vale’s share performance lagged Anglo American’s but outperformed Rio Tinto and BHP. Mr. Pimenta prefers another metric: total shareholder return (TSR). By this measure, from January through Monday (29), Vale delivered shareholders a 30.4% return, compared with 20% for BHP, 19% for FMG, and 18.9% for Rio Tinto.

On the domestic front, where most of Vale’s operations are located, challenges remain. From day one, one of Mr. Pimenta’s priorities has been to improve relations with the company’s stakeholders, including governments at all levels, communities, and clients. The succession process in 2024 was marked by controversy, with President Lula consistently pressing the company.