Brazil's government is facing a political backlash over its apparent efforts to force out the head of mining giant Vale, a case that renews concerns over state meddling in private companies.

Opposition leaders have demanded Finance Minister Mr Guido Mantega to explain reports that he asked a shareholder of Vale, the world's largest iron ore miner, to help seek a replacement for CEO Mr Roger Agnelli.

According to government sources, Mr Mantega had approached Brazilian bank Bradesco, a key Vale shareholder, to request help replacing Mr Agnelli with another CEO.

The incident could tarnish President Ms Dilma Rousseff's mostly market friendly image earned during her first three months in office through strict fiscal discipline and defense of central bank autonomy.

Ms Jose Luciano Dias a Brasilia based political analyst said that "She believes in a big, strong government and has issues with Agnelli. I have no doubt this pressure is coming directly from Dilma.”

A third government source said Rousseff hopes to have Agnelli out of his post before she travels to China in mid April.

Vale, the government and Bradesco officially declined to comment. Vale's top executives will tender their resignations if Agnelli leaves, according to a company source who spoke on condition of anonymity.

Relations between the government and Vale have been tense for years as politicians complained Vale was not doing enough to create jobs by investing in steel production and was not sufficiently involved in the country's economic development.

(Sourced from Thomson Reuters)