BSGR mining operations in Guinea at risk if firm found guilty of corruption

Guinea could cancel billions of dollars worth of mining permits for BSGR Resources (BSGR) if corruption probes in the country and the United States lead to convictions, reports Reuters.

The head of Guinea's mining review committee is the latest twist in an ongoing battle between the West African nation and BSGR, the mining business of Israeli-French billionaire Beny Steinmetz's corporate empire, over the right to mine one of the world's largest untapped iron-ore deposits, known as Simandou.

The vast mountain deposit is one of the richest concessions in all of mining, with in excess of 26 billion tonnes of high-grade iron ore worth more than $50 billion.

RELATED: What you need to know about the Simandou anti-corruption probe

World number two miner Rio Tinto (ASX, LON, NYSE: RIO) is developing the southern part of the vast mountain deposit and has already spent more than $3 billion building open pits. On Thursday, CEO Sam Walsh hinted the company might be soon expanding its interests in the area as the Guinean government is reviewing BSGR licence.
Rio had worked on the northern half, currently held by BSGR and its partner Vale, before its licence was revoked. Based on this, Walsh told Reuters it would “like to get a return on this work”.

All developments on that section has been halted amid an anti-corruption probe, which has already led to the arrests of two BSGR executives in Guinea and the detention of a French citizen, indicted to stand trial in New York.

BSGR is only one of the many mining companies whose permits have come under the scrutiny of Guinea's new government, led by President Alpha Condé.