In a new and unexpected twist in the battle to control Guinea’s rich Simandou iron ore deposits, the companies once operating in the area have began a series of billion-worth lawsuits, with iron ore miner No.2 Rio Tinto (LON, ASX:RIO), suing the world’s largest producer Brazil’s Vale (NYSE:VALE).
The first one to shoot was Vale, which filed Monday an action against his former partner in Guinea BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz’s empire, before the London Court of International Arbitration, Swiss newspaper Le Temps reports (in French).
One of the paper’s sources said Vale is seeking a minimum compensation of US$1.1 billion, due to losses suffered because BSGR’s actions in Guinea. Last week, The West African nation concluded that BSG Resources obtained the Simandou and Zogota concessions through corrupt practices and decided to revoke all mining rights for both companies.
Vale had a 51% stake in the project, which acquire from BSGR in 2010 in a $2.5bn deal.The company however only paid $500 to Steinmetz’s firm, suspending all instalments left as soon as it learned of the accusations against its partner.
Guinea’s President Alpha Conde said Wednesday it was clear the Rio de Janeiro-based firm did nothing wrong, adding the mining giant is free to reapply to acquire rights to one of the largest untapped iron ore deposits in the world.
According to AP, Conde told reporters in Geneva today the country would welcome a new bid from Vale, but it had no preference among bidders and would select one transparently.
When contacted about it, a BSGR spokesman told MINING.com it had no comments, adding the company was “looking forward to proving the truth through due legal process by prosecuting our rights in the very near future against the Guinean Government.”
Here comes Rio Tinto
MINING.com learned Wednesday that mining giant Rio Tinto, which has spent years of work and several billions in the southern part of the $20 billion Simandou iron ore project, has filed its own lawsuit against both Vale and BSGR for what it qualifies as a “steal” of its previously-owned concessions.
For the rest of this article, click here: http://www.mining.com/war-of-titans-rio-tinto-suing-vale-over-iron-ore-rights-in-guinea-28216/