Billionaire Beny Steinmetz, the founder and owner of a company embroiled in a long-drawn-out dispute with Vale (NYSE: VALE) over lost rights to the massive Simandou iron ore project in Guinea, claims to have fresh evidence that will help him reverse a $2bn arbitration award to the Brazilian miner.
The documents, the Financial Times reported on Sunday, allegedly prove that Vale was aware of potential problems with how the rights to develop Simandou had been obtained, but “chose to close its eyes.”
The case goes back to 2010, when Vale agreed to buy 51% of the iron ore licenses belonging to BSG Resources, Steinmetz’s mining arm.
Four years later, Guinea revoked both the Rio de Janeiro-based miner and BSGR’s rights over the massive iron ore deposit.
Vale then filed a successful claim against its former partner company in the London Court of International Arbitration to recover an upfront payment to BSGR and money it invested in Guinea.
The figure requested and later awarded by a London arbitration court amounted to $1.25 billion plus interest and costs, totalling $2 billion.
Steinmetz says the evidence, gathered by private intelligence agency Black Cube, will allow him to serve subpoenas on Vale and Rio Tinto (ASX, LON: RIO), which still holds a 45% stake in the other half of Simandou.
The magnate told FT he believed both companies have documents that can help his case.
Vale claims Steinmetz’s move is just a new attempt to avoid paying the massive compensation awarded to the company.
Earlier this month, the world’s no. 1 iron ore miner launched legal action in New York to determine whether funds paid to BSGR within the framework of their former Simandou partnership were used for property investments in the United States.
Vale expects to prove its former partner in Guinea fraudulently funneled $500 million into Manhattan real estate’s magnates Aby Rosen and René Benko.
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 the steelmaking material.