RPT-UPDATE 1-Panel says Guinea should strip BSGR, Vale of rights to iron deposit – by Silvia Antonioli, David Rohde and Saliou Samb (Reuters India – March 10, 2014)

http://in.reuters.com/

LONDON/CONAKRY, March 7 (Reuters) – A technical committee in Guinea has recommended the government strip BSG Resources (BSGR) and its partner Vale of the rights to exploit a giant iron ore deposit because the panel alleges BSGR obtained the concession through corruption, sources close to the matter said.

The latest development in a saga surrounding one of the world’s largest mining deposits casts uncertainty over the future of the sought-after Simandou, a mine that could help one of Africa’s poorest countries to prosper.

It also raises concerns over the position of Brazilian miner Vale, which, according to a source close to the company, has spent more than $1 billion in its Guinean venture and risks seeing its investment and efforts wiped away.

BSGR vigorously denied the allegations of wrongdoing and said it believes the committee’s procedure is part of a predetermined and orchestrated plan to expropriate the company’s mining rights.

“The review has been conducted throughout without any respect for basic due process and procedural fairness,” a BSGR spokesman said on Friday.

The committee’s report has no substance or sufficient evidence to support its recommendations, the spokesman said.

Vale, which has not been accused of any wrongdoing, declined to comment.

Nave Toure, president of the technical committee, told Reuters it had not yet submitted its recommendations to the strategic committee which is due to make a final decision.

He added that his committee did not have the authority to decide on handing mining rights to a third party.

“(The technical committee) does not have the authority to make recommendations that concern the reallocation of any mining title, as this is decided by the mining department as is stated in the mining code.”

CONCESSIONS

Under President Alpha Conde, Guinea launched a review in 2012 intending to shed light on certain mining concessions granted under previous administrations.

In a report prepared after months of hearings and investigations, Guinea’s technical committee recommends the government re-tender the rights on the northern portion of Simandou, three sources said this week.

The committee alleges BSGR used corrupt practices to help obtain the concessions in 2008.

For the rest of this article, click here: http://in.reuters.com/article/2014/03/10/guinea-mining-simandou-idINL6N0M70T920140310