Court grants Steinmetz access to Vale’s Simandou files

Israeli billionaire Beny Steinmetz has been at the centre of an international investigation into alleged bribery to win mining rights in Guinea. (Image taken from Beny Steinmetz’s website)

Israeli diamond and mining tycoon Beny Steinmetz has obtained access to Vale’s documents over the deal to explore the giant Simandou iron-ore mine in Guinea. 

Last week, the São Paulo Court of Justice (TJ-SP) authorized a petition by Israeli lawyers in Brazil known as ‘anticipated production of evidence’, as newspaper Valor Econômico first reported.

The court allowed Steinmetz lawyers to access documents used by Vale to decide the VGB joint venture, the result of a partnership between the Brazilian mining company and Steinmetz’s Israeli company, BSGR.

BSGR acquired the Simandou mine for $165 million and sold half of it eighteen months later to Vale, for $2.5 billion.

In January, the billionaire businessman was found guilty of bribing a public official to secure the giant Simandou iron-ore mine in Guinea. He was sentenced to five years, but his lawyers say they will appeal all the way to the Supreme Court.

Steinmetz and two colleagues were convicted of paying bribes of $8.5 million to Mamadie Toure, the wife of Guinea’s deceased former president Lansana Conte to help secure rights to the project.

BSGR secured the concession only weeks before Conte’s death.

At two billion tonnes of iron ore with some of the highest grades in the industry, Simandou is one of the world’s biggest and richest reserves of steelmaking material, but it has a controversial past.

Vale has accused Steinmetz’s BSG Resources (BSGR) of fraudulently inducing it to buy a 51% stake in a joint venture to develop the mine.

The billionaire says Vale executives believed that the concession of the Simandou mine would have involved paying bribes and even so, they proceeded with the deal.

With the new court decision, Steinmetz will have access to audio and video of Vale’s meetings discussing the partnership with BSG, in addition to emails exchanged by directors of the mining company.

Vale said that the press has reported ‘Mr. Beny Steinmetz’s unusual attempts to re-discuss a matter already decided by international courts,’

“His lawyers maintain divergent versions: abroad, the businessman claims that there was never any illegal act on his part, while in Brazil, he claims that Vale was aware of the irregularities practiced by him and by BSGR”.