BSGR ordered to hand over Simandou-related documents to UK anti-corruption body
Lawyers for BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz’s business empire, will have to surrender thousands of pages of documents related to the acquisition of Simandou, a iron ore mining project mired in allegations of corruption, expropriation and corporate espionage.
The decision, made by the UK High Court Thursday, forces BSGR representatives to hand out such documents — until now refused to be shared by the company — to the country’s anti-corruption agency, the Serious Fraud Office (SFO), Financial Times reported.
BSGR was awarded rights over Guinea’s Simandou, one of the world's largest untapped iron ore deposits, a few days before the death of dictator Lansana Conté, in 2008, after spending more than $160 million exploring the prospect.
In 2010 the company sold a controlling half of its concession to Brazil’s Vale (NYSE:VALE) for $2.5 billion.
But when Guinea's new president, Alpha Condé, took charge he ordered all mining deals signed under his predecessors had to be reviewed.
As a result, BSGR was stripped of its mining rights last year and the Guinean government signed a new deal with Rio Tinto (LON:RIO)and its Chinese partner, Chinalco, to develop the two southern blocks they had held onto through all these. Rio had to pay $700 million, part of which was upfront taxes.
BSGR took the government of Guinea to an international arbitration court seeking compensation, but the process concluded instead that BSGR had gotten its concession through bribery. The company not only has refused such accusations, but also accused President Conté of concocting false corruption allegations against BSGR to justify, the seizure of its mining rights.
Shortly after, Rio filed a suit in New York against BSGR and Vale, claiming they conspired to steal the northern blocks. A series of lawsuits followed, making the Simandou rights case one of the most far-reaching corruption investigations of recent years.
So far neither BSGR nor Steinmetz have been charged in any of the probes.
The sought after iron ore deposits in Guinea are said to have the potential to transform the fortunes of the impoverished West African nation.