Top miner Rio Tinto Plc has sued Brazilian giant Vale S.A. and Israeli billionaire Beny Steinmetz and his BSG Resources Ltd., charging they conspired to steal mining rights to one of the world’s biggest untapped iron-ore deposits by bribing government officials in Guinea.
Rio Tinto said the No. 1 iron ore miner, Vale, used confidential information from Rio Tinto during discussions in New York to purchase a stake in the Simandou property before passing it to Steinmetz and BSGR to acquire the rights, according to the Manhattan U.S. District Court filing as quoted by Bloomberg News.
Rio Tinto officials said they dedicated 11 years and hundreds of millions of dollars developing Simandou in southeast Guinea. In 2008, however, representatives said they lost 50% of their interest, worth billions, after Conakry officials announced plans to transfer the interest to BSGR instead, the complaint said.
Steinmetz and BSGR, said Rio Tinto, bribed Guinean officials, giving $200 million to Mahmoud Thiam, the former mining minister. BSGR, known mainly for diamond mining, then partnered with Rio de Janeiro-based Vale because of its iron mining expertise and resources to develop the mine, Rio Tinto added.
“While BSGR and Steinmetz pursued their illegal bribery in Guinea, Vale’s role was to continue to obtain Rio Tinto’s confidential information under false pretenses, and pass that information to Steinmetz and BSGR to facilitate efforts to induce the Guinean government to rescind Rio Tinto’s rights,” Rio Tinto said, according to Bloomberg.
Thiam, the ex-mining minister, termed the Rio Tinto allegations false and “borderline comical” in an email statement to Bloomberg. “Unfortunately,” he added, “it’s Guinea’s economy that will suffer at the hand of corporate bandits.”
A Geneva-based lawyer for Steinmetz was unavailable, reported Bloomberg. BSGR spokesman Theo Crutcher said he couldn’t immediately comment, while Vale’s press office in Rio De Janeiro declined to immediately comment.