Steinmetz, BSG Resources Win Dismissal of Rio Tinto Lawsuitby and
Billionaire accused of trying to steal rights to iron ore
Vale SA, alleged confidental-data source, also wins dismissal
A judge threw out Rio Tinto Plc’s lawsuit claiming Israeli billionaire Beny Steinmetz and his BSG Resources Ltd. conspired with Vale SA to steal rights to the world’s biggest untapped iron-ore deposit.
U.S. District Judge Richard Berman in New York ruled Friday that Rio Tinto waited more than a year too long to file its civil racketeering claims in 2014, agreeing with the defendants that a four-year statute of limitations started when the government of Guinea rescinded Rio Tinto’s rights to mine in the nation’s Simandou region in December 2008. Berman also said Rio Tinto failed to identify a pattern of racketeering activity by the defendants.
The ruling bars London-based Rio Tinto from refiling the racketeering claims. The judge dismissed related New York state law claims including fraud and conspiracy, leaving open the possibility that Rio Tinto can try to refile them in state court now that the federal matter has been disposed of.
“Rio’s case against BSGR and Mr. Steinmetz has been thrown out in its entirety and Rio has been forbidden to attempt to reassert its baseless claims,” BSG Resources said in a statement.
Rio Tinto shared confidential information with Vale in discussions over buying a stake in the Guinean mining operation, according to the complaint. Vale then passed the information to Steinmetz and BSG Resources, who used it to advance their own bid for the mining rights, Rio Tinto said.
Rio Tinto claimed it spent 11 years and hundreds of millions of dollars developing its Simandou mining concession. It claimed the Guinean government withdrew half the company’s interest, worth billions of dollars, after a $200 million bribe to a former mining minister.
Berman in December 2014 denied a bid to dismiss the case on grounds that it should have been filed in the U.K.
In January 2013, a grand jury in New York began investigating possible violations of the Foreign Corrupt Practices Act and criminal money-laundering in connection with the Simandou mining concession, according to U.S. prosecutors.
In 2014, Frederic Cilins, a Frenchman with ties to Steinmetz and BSG Resources, was sentenced to two years in prison for obstructing the grand jury investigation. Prosecutors claimed he tried to bribe a witness to destroy evidence and lie to U.S. investigators. Cilins was released in January. Prosecutors said Cilins, who was arrested at the airport in Jacksonville, Florida, had a “very close personal relationship” with Steinmetz.
Rio Tinto has estimated the Simandou mining development could produce 100 million tons of iron ore a year, double Guinea’s gross domestic product and add 45,000 jobs in the country.
The lawsuit is Rio Tinto Plc v. Vale SA, 14-cv-03042, U.S. District Court, Southern District of New York (Manhattan). The criminal case is U.S. v. Cilins, 13-cr-00315, U.S. District Court, Southern District of New York (Manhattan).