Brazilian miner Vale files $2B lawsuit over Guinea project

Simandou holds over two billion tonnes of iron ore reserves and some of the highest grades in the industry (66% – 68% Fe which attracts premium pricing). (Image courtesy of Rio Tinto Simandou)

Brazilian miner Vale SA said on Wednesday it has filed a lawsuit in the United States to force BSG Resources Ltd (BSGR) to pay it about $1.25 billion, as mandated by an arbitrator in a dispute over a joint venture in Guinea, plus interest and expenses.

Earlier this month, Vale said an arbitration court in London had ordered BSGR to pay $1.246 billion. The suit, filed in the U.S. District Court for the Southern District of New York, seeks payment of more than $2 billion when interest and expenses are taken into account.

The arbitration case stemmed from a dispute between Vale and BSGR, which is controlled by billionaire Beny Steinmetz, over Simandou, which contains billions of tonnes of high-grade iron ore, making it one of the world’s biggest iron ore deposits.

Vale has accused BSGR of fraudulently inducing it to buy a 51 percent stake in a joint venture to develop the mine, a concession later revoked by the Guinean government on charges the rights were obtained through corrupt means.

A government report at the time said Vale was not a participant in the corruption.

(By Gram Slattery; Editing by Paul Simao)