“It’s always a messy business when governments start to get involved in running companies; it usually ends in disaster,” he told MNN.

Citing a leak from a government official to a Sao Paulo newspaper, Reuters reported that the government was seeking to replace Flores with Nelson Barbosa, the economic policy secretary at the Finance Ministry.

On Sunday, the same newspaper quoted a government official as saying that Vale chief executive Roger Agnelli had departed his role on Friday and the search had begun for his replacement.

This follows a report last week in London’s Financial Times that the government was aiming to block a possible extension of Agnelli’s contract in May.

The Brazilian government privatised Vale in 1997 but remains the dominant stakeholder, and has expressed concerns that the company is not doing enough to advance national interests.

Wendt expects the emerging developments at Vale to form another classic example of governments meddling in mining affairs.

The South African government is undertaking research on the prospect of nationalising mines in the country, while Rio Tinto CEO Tom Albanese has labelled resource nationalism as a “curse on mining”.

Ageing Zimbabwean President Robert Mugabe also made a threat to take over foreign-owned mining companies in the country over the weekend.

“What has really surprised the market is that we expect it from South Africa and Zimbabwe, given the nature of politics there, but we didn’t expect it from an emerging powerhouse like Brazil,” Wendt said.

While recognising it was hard to speculate on what lies ahead for Vale, Wendt said if the Brazilian government appointed someone more focused on domestic operations, there was a possibility that some of Vale’s international operations could become a little less important.

Vale established its coal business in Australia after purchasing a portfolio of mines and projects from private company AMCI for $A835 million in February 2007, including stakes of the Carborough Downs, Isaac Plains and Integra mines.

The company’s $US1.3 billion ($A1.3 billion) Moatize coal project in Mozambique is expected to kick off mid-year, targeting 11 million tonnes per annum of production including 8.5Mtpa of hard coking coal under first-stage development.

Vale is not commenting on reports of management changes.