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Brazil’s Vale appointed a domestic industry insider as its new chief executive officer as the world’s largest iron ore exporter prepares for a major change in its shareholding structure.

The appointment of Fabio Schvartsman, the CEO of Klabin, Brazil’s largest paper and cardboard producer, comes amid speculation over Vale’s future with the imminent end of a controlling shareholder agreement that has governed the company for nearly two decades.

“Fabio Schvartsman was appointed by Vale’s Board of Directors from a list prepared by Spencer Stuart, an international recruiting company,” Vale said.

There has been speculation that the appointment of a replacement to existing CEO, Murilo Ferreira, would be subject to political interference with reports that some political parties wanted to install their own appointee to head the miner.

Vale is controlled by a group of Brazilian state pension funds in conjunction with a unit of private bank Bradesco and Japan’s Mitsui under a tight shareholder agreement. The group last month agreed to unwind this agreement and replace it with a dispersed ownership structure with no one shareholder retaining definitive control.

At the same time, Mr Ferriera, a Vale veteran respected by markets for his efforts to navigate the company through the commodities downturn, announced his departure effective next month.

Vale said Mr Schwartzman had worked for Klabin since 2011, prior to which he had headed Telemar, a Brazilian phone operator, and Ultrapar, a Brazilian fuel distribution company. He has also worked for San Antonio International, an oil driller, and Duratex, a wood and furnishing product company.

His appointment ends speculation Vale would tap another company veteran either currently working within the miner or already retired to run its operations.

Copyright The Financial Times Limited 2019. All rights reserved.

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