A Guinean government review into ownership of the world’s biggest untapped iron-ore deposit has recommended billionaire Beny Steinmetz’s BSG Resources Ltd. and Brazil’s Vale SA (VALE5) be stripped of the project.
A government committee said it found evidence of corruption in the award of the licenses for Simandou’s blocks 1 and 2 and the Zogota project, according to a copy of the recommendation seen by Bloomberg News. “These corrupt practices tarnish and thus void the mining titles and the mining convention,” it said.
BSGR has denied any wrongdoing in connection with gaining the license. A spokesman for BSGR in London wasn’t able to immediately comment, and the Vale press office in Rio de Janeiro didn’t immediately reply to an e-mail. The report said the evidence suggested Vale was not involved in corruption.
The committee was “established to provide a pretext to illegally seize our assets in Guinea,” BSGR said in a Feb. 11 e-mailed statement. Guinea ranked 150 out of 177 in Transparency International’s 2013 corruption perceptions index.
The BSGR-Vale venture “was created with the blessing of the Government and remains Guinea’s best chance of achieving production at Simandou,” BSGR said. “The committee is using fabricated evidence but the reality is BSGR followed the law.”
Steinmetz, who is Israel’s richest person and has a net worth of about $6.7 billion, according to the Bloomberg Billionaires Index, amassed his fortune initially in the diamond trade, according to his personal website.
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