A Guinean review into ownership of the biggest untapped iron-ore deposit has recommended seizing mining rights owned by a venture of BSG Resources Ltd., billionaire Beny Steinmetz’s company, and Brazil’s Vale SA. (VALE5)
A government committee set up in 2012 to review mining agreements has advised the West African country to seize the licenses “and terminate existing legal agreements,” BSGR said today in an e-mailed statement sent to Bloomberg News by external public relations firm Powerscourt. BSGR was informed of the recommendation in a letter from the committee to its venture with Rio de Janeiro-based Vale, known as VBG, it said.
The letter “provides no substance to support its recommendations other than making reference to allegations that BSGR has robustly and repeatedly denied,” Guernsey-based BSGR said. The review “is part of a pre-determined and orchestrated plan to expropriate the company’s legally-acquired mining rights,” it said.
A final ruling by the Guinea government endorsing the review’s findings would obstruct Steinmetz, 57, from pursuing his plan to develop the Simandou deposit with a $10 billion mine, port and rail project. The recommendation from Guinea comes less than a year after a U.S. grand jury began considering whether bribes were paid by a man linked to BSGR, Frederic Cilins, to a wife of former President Lansana Conte to help the company win licenses over the ground.
“BSGR places the government of Guinea on notice that any steps taken to conclude its pre-determined outcome without addressing basic due process and procedural fairness will result in international arbitration against the Republic of Guinea,” it said.
Nava Toure, president of Guinea’s Technical Committee for the Review of Mining Agreements, and President Alpha Conde’s spokesman Moussa Cisse couldn’t be reached for comment.
Vale owns a 51 percent stake in VBG, with BSGR holding the remainder.
Steinmetz, who is Israel’s richest person and has a net worth of about $6.8 billion, according to the Bloomberg Billionaires Index, amassed his fortune initially in the diamond trade, according to his personal website.
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