Citing corruption, the government of Guinea has canceled permits held by BSG Resources and its joint venture partner, Brazil’s Vale S.A., for their massive Simandou iron ore deposit while canceling their Zogota mining concession.
The move followed a recommendation stemming from an 18-month technical committee investigation accusing BSGR, owned by Israeli billionaire Beny Steinmetz, of gaining rights through “fraudulent conditions” in the impoverished West African nation, according to state television.
However, majority shareholder Vale, one of the world’s biggest miners and the No. 1 iron ore producer, was deemed not guilty of corruption, having been uninvolved in the license acquisition procedure; it can now bid for permits on its own. Rio de Janeiro-based company officials were unavailable for immediate comment.
BSGR, meanwhile, denied the claims amid promises to seek international arbitration. “BSGR obtained the rights lawfully and will mount a vigorous effort to overturn this decision — predictable as it is unlawful,” BSGR said in a statement quoted by Reuters.