On April 23, a lawsuit was filed by Vale against BSG Resources Ltd. (BSGR) in the United States District Court for the Southern District of New York to enforce Vale’s arbitral award against BSGR, totaling more than US$ 1.2 billion — with interest and costs exceeding US$2 billion — which was issued on April 4 by an arbitral tribunal with the London Court of International Arbitration.

The award arose out of alleged fraud and breach of representations and warranties committed by BSGR, a company owned by billionaire Beny Steinmetz, to persuade Vale to purchase a 51% interest in concessions held by BSGR to develop an iron ore deposit in Simandou in the Republic of Guinea, and the adjacent Zogota concession. Vale paid BSGR an initial price of US$500 million, and invested more than US$700 million, principally in Zogota, before the Guinean government withdrew the concessions when it found that BSGR obtained its rights to Simandou as a result of bribery of Guinean officials. Vale said the government found Vale had no connection to the corruption activities.

The arbitral award follows a U.S. Department of Justice investigation into one of Steinmetz’s associates, Frederic Cilins, who is serving jail time in the United States.

Vale said it will take the necessary steps to enforce its award against BSGR, as well as against persons connected who it believes to be liable, to have received Vale’s payments to BSGR, or responsible for Vale’s loss.

Vale added that it is investigating reports that BSGR has entered into an agreement with the Republic of Guinea, through a company called Niron plc, that would give it rights to Zogota.