By Gram Slattery and Paula Laier
RIO DE JANEIRO/SAO PAULO (Reuters) - Investors were skeptical on Sunday about the surprise decision by Brazil's Vale SA to remove its high-profile chief executive in the wake of a deadly January accident at one of the world's largest iron ore miner's facilities.
Vale's board dismissed CEO Fabio Schvartsman, as well as three other executives including chief of coal and ferrous metals Peter Poppinga, on a "temporary" basis on Saturday night, after state and federal prosecutors recommended their exit.
Investors and analysts raised questions about his replacement, the head of the firm's base metals division Eduardo Bartolomeo, who is a little-known quantity in the markets, unlike Schvartsman.
"My worry is that dismissing the top executives leaves the company leaderless or with less experienced leadership and simply adds to the turmoil," said John Tumazos of John Tumazos Very Independent Research, which focuses on mining, metals and forest products.
One analyst at a major investment bank, who requested anonymity as he was not authorized to speak to the media, said many clients had reached out to him with concerns since Schvartsman's dismissal.
He called the change a "relevant loss" for the company given Schvartsman's "high caliber and proximity to markets."
While Bartolomeo had often been floated as a possible successor, the analyst said, he is more focused on Vale's physical mining operations than its finances. Bartolomeo's mandate has been to turn around Vale's nickel business but the results have so far been mixed, the analyst said.
More than 300 people are likely to have died when a tailings dam burst at Vale's Corrego do Feijao mine in the Brazilian state of Minas Gerais, releasing massive amounts of toxic sludge. The disaster was the second deadly burst at a Vale-linked tailings dam in Minas Gerais in four years.
Prosecutors are looking into what happened at Corrego do Feijao. While it is not yet clear the extent to which executives knew of the dangers at the mine, documents have emerged in recent weeks showing that some at the firm knew the dam had an elevated risk of rupture.
Newspaper Folha de S.Paulo reported earlier in the week that a manager told executives of the deteriorating state of the dam. Vale has vigorously denied the report.
Some observers said Schvartsman's ouster could offer a fresh start for Vale.
They said his removal was in keeping with changes in Brazil, where the powerful rarely felt serious repercussions for mistakes and misdeeds until recently.
"I think it's prudent and necessary," said Frederico Mesnik, founding partner of Trígono Capital in Sao Paulo. "Being part of the old Brazil, the land of impunity, doesn't work anymore."