Billionaire Israeli businessman Beny Steinmetz goes on trial facing bribery charges in Geneva on Monday. The owner of BSG Resources and two others are accused of paying the wife of Guinea’s deceased former president Lansana Conte $8.5 million to secure the concession rights to the vast Simandou iron ore project.
“It’s a big deal as one of the very few big corruption cases that has gone all the way to court in Switzerland and one of the first times a criminal court will rule on Steinmetz as an individual,” David Muehlemann, a policy analyst at Swiss corporate governance watchdog Public Eye told Bloomberg.
Steinmetz will be in Geneva for the trial, his legal team said. Mamadie Toure, Conte’s widow, is scheduled to testify on Wednesday.
The Israeli magnate’s lawyers allege that Toure was never married to Conte and thus can’t be considered a public official.
“How do you bribe a ghost?” lawyer Marc Bonnant asked Bloomberg.
Steinmetz acquired the rights to the Simandou iron-ore project in Guinea in 2008. With over two billion tonnes of reserves and some of the highest grades in the industry (66% – 68% Fe which attracts premium pricing), Simandou is one of the most easily exploitable iron ore fields outside of Australia’s Pilbara region and Brazil.
At full production, the concession would export up to 100 million tonnes per year. Simandou would by itself be the world’s fifth-largest producer behind Australia’s Fortescue Metals and BHP Billiton.
Vale is also urging a US court to force Steinmetz to respond to the company’s efforts to track down assets and obtain $2 billion it was awarded last year as a result of arbitration.
The case goes back to 2014, after Guinea revoked both the Rio de Janeiro-based miner and BSGR rights over Simandou, following a government probe that concluded they obtained their licenses through corruption.
Brazilian magazine Piauí revealed last month that Steinmetz hired private intelligence agency Black Cube to prove Vale had full knowledge of the process through which the companies gained access to Simandou.
Rio Tinto, which discovered the deposit and held the rights to mining it in its entirety until 2008, is also involved in related legal actions.