Israeli diamond tycoon Beny
Steinmetz, owner of BSG Resources (BSGR), will go on trial in Geneva over allegedly
bribing government officials in Guinea in order to obtain mining rights over
the vast Simandou iron ore project.
Steinmetz and two associates are
said to have given $10 million to one of the wives of former Guinean President
Lansana Conte, who died in 2008.
The magnate reached a deal with Guinean authorities in February, which saw corruption charges against him lifted in exchange for giving up his remaining rights to Simandou.
The country also agreed to partner with mining veteran Mick Davis, who will develop the Zogota iron ore deposit, which also belonged to BSGR.
Geneva, however, has continued its
investigation, which could see Steinmetz jailed for up to 10 years if
convicted.
Chequered history
Simandou is one of the world’s
richest reserves of high-grade iron ore, holding an estimated 2 billion tonnes
of the steelmaking ingredient. It’s also one of the most easily exploitable
iron ore fields outside of Australia’s Pilbara region and top producer Vale’s
Brazilian home base.
The asset, however, has been a
source of headaches for Rio since it was first granted rights to start
prospecting for iron ore two decades ago.
In 2008, one of Guinea’s former dictators
stripped Rio’s rights over two of the four blocks and handed them to BSGR. Rio
was able keep to the two southern blocks, but only after paying $700 million to
the government, which guaranteed the miner tenure for the lifetime of the
Simandou mine.
That deal came under scrutiny in
2016, forcing Rio to managers over a questionable $10.5 million payment
made to a consultant who helped the company secure the two blocks and alerted
authorities, including the US Department of Justice and the UK’s Serious Fraud Office.
BSGR and Steinmetz were also subject of several investigations over bribery and corruption accusations, which ended in February this year, through a deal with Guinean President Alpha Conde.
Currently, the West African country is accepting bids for the blocks given up by Steinmetz. Interested companies have until Aug. 19 to draw the necessary documents to prepare their proposal.