UPDATE 1-Key Vale partners want to keep CEO to stem political pressure -Valor

(Recasts, adds details and share performance)

SAO PAULO, Feb 13 (Reuters) - Vale SA’s top non-government shareholders want Chief Executive Officer Murilo Ferreira in the job for another two years to stem pressure from Brazilian politicians to appoint an ally at the helm of the world’s No. 1 iron ore producer, newspaper Valor Econômico said on Monday.

Valor, which cited unnamed people familiar with the matter, said some members of Vale’s controlling bloc were considering voting for the renewal of Ferreira’s term when it expires next quarter. Bradespar SA and Japan’s Mitsui & Co are the private-sector members of the bloc.

Valor said members of President Michel Temer’s PMDB party and Senator Aecio Neves of the PSDB party from the mineral-rich Minas Gerais state, where Vale is based, were vying to influence the selection of the new CEO. Such disputes have gone on for months, Valor said.

In January, Reuters reported that shareholders led by Bradespar and pension fund Previ Caixa de Previdência could propose Ferreira stay on for at least another year as part of discussions over a new shareholder accord. His term expires midway through the second quarter.

Vale’s media representatives declined to comment on the Valor report. Representatives for Neves, Andrade and Temer did not immediately respond to requests for comment.

Preferred shares, the company’s most widely traded class of stock, rallied 4.6 percent to 32.65 reais, on top of Friday’s 6.6 percent jump, as iron ore prices soared and on optimism that shareholders will seek to block a political appointee as CEO. The stock is up 40 percent this year.

The reported tension over the Vale job is the latest sign of strain between the two biggest parties in Temer’s coalition. The PSDB and some in Temer’s PMDB have butted heads over a string of ministry posts and may run rival candidates in the 2018 presidential election.

Vale was partly privatized in 1997, although the government continues to wield influence over it through the investment holding company of state development bank BNDES and state-controlled pension funds. Bradespar, the funds, Mitsui and BNDESPar are all members of Valepar SA, which has control of the company. (Writing by Brad Haynes; Editing by Guillermo Parra-Bernal and Lisa Von Ahn)