FINANCIAL POST, 21 Oct 2009
By Peter Koven
Roger Agnelli, the chief executive of Brazilian mining giant Vale SA, should be a happy man these days.
With the global economy recovering and demand for iron ore on the rise, the outlook for Vale is better than it has been in months.
But Mr. Agnelli is also dealing with a political firestorm in Brazil and employee unrest in Canada that is making life difficult for him.
Vale postponed planned investor days this week in New York and London, saying it was purely a scheduling issue. But in a sign of the company’s tarnished employee relations, the United Steelworkers accused it Wednesday of cancelling the events to avoid difficult questions from investors. The union, which represents about 3,500 striking Vale Inco workers in Canada, referred to Vale as a “company in disarray.”
“They’re hiding from us and from the public,” said Bob Gallagher, head of communications for the United Steelworkers.
The Vale Inco workers have been off the job since July as they fight concessions demanded by the parent company. They are using that time to raise unrest everywhere they can. They protested in New York, Toronto and Rio de Janeiro Wednesday, after doing the same in Germany and Sweden last week.
Vale has received a wave of criticism from Brazilian government leaders, up to and including leftist president Luiz Inacio Lula da Silva.
There has been talk in Brazil that the government could dramatically increase the country’s 2% mining royalty, a move that appears to be a direct shot at Vale. In addition, there were rumours Mr. Lula wanted to remove Mr. Agnelli from his job, though that talk has died down.
“We’re trying to point that out. When you extract resources from communities, you really do have an obligation to invest in them,” Mr. Gallagher said.
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