Guinea's Simandou battle: Beny Steinmetz cries foul

Published by MAC on 2013-12-29
Source: Reuters, Bloomberg. Mining.com, statement

Israel's richest man sues Global Witness

Israeli billionaire Steinmetz sues Global Witness

Reuters

17 December 2013

London - Israeli billionaire Beny Steinmetz and three others working with the mining arm of his business empire, BSG Resources, have sued campaign group Global Witness, claiming damages for what they say are breaches of their human and data protection rights.

BSG Resources (BSGR) is battling for the right to develop half of the Simandou deposit in Guinea, one of the world's largest untapped iron ore resources.

The government of Guinea, which is running a review of mining contracts allocated by previous administrations, says BSGR bribed officials to win a 2008 license to develop the promising deposit. Global Witness, which campaigns for transparency in the resources industry, has on several occasions linked BSGR to corruption allegations.

BSGR denies it paid bribes for its Simandou concession and has criticized the contract review, which it says is designed to allow Guinea to renege on its obligations. It has also accused international advisers working directly and indirectly with the Guinean government, including financier and philanthropist George Soros, of orchestrating a smear campaign against it.

In court documents detailing the claim against Global Witness - filed with London's High Court and served on the campaign group on Monday - Steinmetz and the three other claimants said they were suing under Britain's data protection legislation, which safeguards the right to privacy.

They accused Global Witness of unfairly obtaining and using - but then refusing to produce on request - personal data on those named in the claim, including Steinmetz himself, BSGR'S executive chairman David Clark, and Dag Cramer, a director of BSGR and chief executive of Onyx Financial Advisors, an adviser to BSGR.

According to the documents, they expect to recover up to 25,000 pounds ($40,700).

"Each of the claimants has suffered distress as a result of the unfair processing of their respective personal data," the claim said.

"The processing of incorrect information has contributed to and formed an integral part of an intentional campaign to propagate misleading information in the public domain against BSGR and those associated with it (...)"

BSGR, in a statement, said Global Witness was compromised by its connection with Soros, whose charitable foundations are among those contributing financial support to the group, and whom the miner accuses of influencing a campaign on Guinea.

Global Witness, though, dismissed the claim as an attempt to "stifle journalism in the public interest". It has in the past denied that either Soros or his Open Society Foundations exert control or influence over the activities of Global Witness.

"This is an attempt to divert attention from one of Africa's biggest mining scandals," Global Witness campaigner Daniel Balint-Kurti said.

Soros said in a statement published by the Financial Times last year that he had no business interest in the mining industry of Guinea, no intention of acquiring any and had "no personal grudge" against Steinmetz.

A spokeswoman for Open Society in London had no immediate comment on Monday.

(Reporting by Clara Ferreira-Marques; Editing by Mark Potter)

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BSGR to skip hearing as Guinea weighs seizing asset

Jesse Riseborough & Andy Hoffman

Bloomberg

9 December 2013

Relations between Israel's wealthiest person Beny Steinmetz and the mineral-rich African nation of Guinea have deteriorated to such an extent that neither the billionaire nor any of his representatives plan to attend a final hearing into the ownership of a prized iron-ore asset.

While Steinmetz was once close enough to a former leader of the country to invite him to his daughter's 2009 wedding, his BSG Resources Ltd. has more recently been fighting for the release of two executives from a prison in the capital Conakry. The company has said it's the victim of a smear campaign that has culminated in a 14-month government review into how BSGR won rights to one of the world's largest untapped iron-ore deposits. That review is set to conclude at a hearing this month that has the power to strip BSGR of the asset.

Steinmetz's plans to spend $10 billion building an iron-ore rail, port and mine complex have been halted after what started as a Guinean review into how his company gained the rights in 2008 widened to at least four other nations. In April, a U.S. grand-jury began looking at whether bribes were paid by a man linked to BSGR, Frederic Cilins, to a wife of former President Lansana Conte. BSGR, which missed a Dec. 2 deadline to answer questions from the government, denies wrongdoing.

"We have a deadline, and if they give us a deadline we don't care about what they say," Steinmetz's Geneva-based lawyer Marc Bonnant said by phone on Dec. 3. "But we are going to definitely give answers. Nobody is going to Guinea, of course." A spokesman for BSGR declined to comment.

Gifts, Payments

The government last month asked BSGR and partner Vale SA of Brazil to provide details of gifts and payments allegedly passed to Guinean officials to help their venture win access to the ground in 2008, according to a letter sent to BSGR's operation in the country and seen by Bloomberg News. Written evidence was required to be submitted to the review committee eight days before the planned Dec. 10 hearing, the letter showed.

That hearing has been delayed to Dec. 16 to allow the BSGR- Vale partnership to study evidence that the government will present at the hearing, a person with knowledge of the process said, asking not to be identified because the information isn't public.

Ibrahima Sory Toure, vice president of BSGR and director of public relations, and Issaga Bangoura, a security official of the company, were released on Nov. 29 after being arrested in April as part of a Guinean investigation.

VBG Venture

"They are not in prison any more, but the investigations pursue their normal course," said Sorry Cisse, public prosecutor for the Court of Kaloum, a district of Conakry. Toure and Bangoura are prohibited from leaving Conakry or meeting any person in connection with the matter.

The Vale-BSGR venture, known as VBG, wrote to the Guinean committee in a Nov. 7 letter, also seen by Bloomberg, that it had referred the questions to BSGR and asked them to respond, because the joint entity was only established in 2010, after the Simandou rights were won. VBG, 51 percent controlled by Vale, said it's willing to appear at the hearing in Conakry and will try to respond to questions.

Guinea last month asked the venture to clarify responses to allegations made in 2012, and denied by BSGR, that payments and gifts were given to senior government and military officials from 2005 that helped it obtain the site.

Diamond Trade

Guinea asked for details of any gifts or payments made to the now deceased Conte, military figures, former Mines Minister Mahmoud Thiam, who was once an adviser to UBS AG and Bank of America Corp., and Conte's fourth wife.

Steinmetz, who has a net worth of about $7.1 billion, according to the Bloomberg Billionaires Index, amassed his fortune initially in the diamond trade, according to his personal website.

Guinea is seeking to make a ruling on the license review by early next year, a person with knowledge of the matter said in October. The nation ranked 150 out of 177 in Transparency International's 2013 corruption perceptions index.

The country plans to preserve Vale's interest in Simandou, President Alpha Conde, who became Guinea's first democratically elected president in 2010, said in a Nov. 25 interview in Abu Dhabi.

"It's out of the question to hurt Vale; at the same time, the law should be obeyed, so we'll have to find a solution," he said. Conde declined to comment on whether the concession would be offered to bidders again, or given back to Rio Tinto Group should BSGR's contract be canceled.

Important Project

Simandou is an important project for Vale and it plans to wait for the outcome of Guinea's review process before making any decisions about future development, Clovis Torres, the company's general counsel, told reporters Dec. 5 in London.

Rio Tinto, the world's second-biggest mining company, was stripped of two of the four blocks of land making up the Simandou deposit in 2008. Rights to the ground were subsequently transferred to BSGR, which sold 51 percent of its stake to Vale in 2010 in a deal valued at as much as $2.5 billion. Rio said in August it would be interested in regaining control of the disputed iron-rich ground.

--With assistance from Ougna Camara in Conakry. Editors: John Viljoen, James Amott

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Simandou hearing delay hints at Vale-BSGR settlement

Frik Els

Mining.com

10 December 2013

The Simandou mountains in Guinea holds some of the richest iron ore deposits in the world and has the potential to transform the fortunes of the impoverished West African nation.

World number two miner Rio Tinto is developing the southern part of the vast mountain deposit with first production from the massive $20 billion project not expected until late 2018 at the earliest.

The northern part of the Simandou concession is held by BSG Resources, a company in the stable of billionaire diamond magnate Beny Steinmetz, and Brazilian giant Vale.

All work on the section awarded to BSGR by a former Guinea dictator in 2008 and 50%- sold to Vale in 2010 has been halted as the government of Guinea under democratically elected president Alpha Condé revisits all mining contracts entered into under previous regimes.

Reuters reports Tuesday the committee reviewing the agreements has delayed hearings scheduled for today where VGB - the Vale-BSGR partnership in Guinea - was to respond to corruption allegations:

A source at VGB saw agreement on the new hearing date as a positive sign for the group. "This step by the Guinean government proves that our rights are not being challenged. Now it's up to senior management to negotiate," said the source, who asked not to be named.

Last month Condé visited Brazil where he met with Vale's director of corporate affairs Rafael Benker. Condé was in the country on invitation of the Lula Institute, an NGO founded by former president Luiz Inacio Lula da Silva.

Lula is said to have close ties to B&A Mineração, an infrastructure and mining investment company set up by Roger Agnelli, former boss of Vale and a large Brazilian bank. Late last year BHP Billiton sold its 40% stake in its massive Nimba project in the same district as Simandou to B&A.

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Guinea frees two BSGR officials in mining corruption probe

Reuters

2 December 2013

Conakry - Guinea has released two officials of BSGR, the mining arm of Israeli billionaire Beny Steinmetz's business empire, after detaining them for seven months for alleged involvement in a corrupt mining deal.

Ibrahima Sory Toure, a vice president of BSGR in Guinea, and Issaga Bangoura, a security official, were released on bail on Friday evening, a government source and the company's lawyer in Conakry told Reuters.

"They spent the night with their respective families. They were freed on bail," BSGR's lawyer Momo Sakho said on Saturday.

Guinea alleges that BSGR bribed officials and Mamadie Toure, the wife of Guinea's former president, to win a licence in 2008 to develop the northern half of the vast Simandou iron ore deposit, one of the world's largest untapped reserves.

Ibrahima Sory Toure is Mamadie Toure's brother.

The government is currently carrying out a review of how the company obtained the mine and has called BSGR for a hearing on Dec 10.

BSGR's lawyer said the company will wait to see what steps the government takes next in the case involving its officials.

BSGR denies the corruption accusations and has criticised the government review, which it says is designed to allow Guinea to renege on its obligations.

In a separate probe linked to the same deal, U.S. authorities in January began investigating potential illegal payments made to obtain mining concessions in Guinea and transfers of those payments to the United States.

FBI agents arrested BSGR representative Frederic Cilins in Florida in April on charges of obstructing a criminal investigation, tampering with a witness and destruction of records. (Reporting by Saliou Samb; Writing by Bate Felix; Editing by Hugh Lawson)

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New evidence ties BSGR to company behind Guinea mine bribery

http://www.globalwitness.org/library/new-evidence-ties-bsgr-company-behind-guinea-mine-bribery

15 August 2013

• Beny Steinmetz Group Resources director set up company that promised
  bribes
• BSGR misled with claims Pentler Holdings was set up independently
• Representatives wired payments to president's wife
• Global Witness revealed in April that BSGR and Pentler signed
  corrupt contracts

A director of Beny Steinmetz Group Resources set up a company that signed corrupt deals with the wife of an African president in a multi-billion-dollar mine scandal, Global Witness has learned.

Pentler Holdings Ltd, an offshore company that held shares in BSGR's mining interests in Guinea, promised millions of dollars in bribes, according to contracts seen by Global Witness. BSGR says Pentler was established independently. New information shows that claim is misleading.

BSGR's former representative in Guinea is under arrest in the US for trying to destroy the contracts and obstructing a grand jury investigation. BSGR argues that the contracts are forged. It says the corruption allegations are "entirely baseless" and that it has always acted "to the highest standards of corporate governance."

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