Rio Tinto sues Israeli billionaire Beny Steinmetz – by Ian Cobain (The Guardian – May 1, 2014)

http://www.theguardian.com/uk

Anglo-Australian mining company alleges that BSG Resources and Brazilian mining corporation Vale were guilty of taking their mining rights

The Anglo-Australian mining company Rio Tinto is suing Israeli billionaire Beny Steinmetz, accusing him of stealing one of the world’s largest untapped iron ore reserves with a scheme that breached US laws against organised crime.

In the latest twist in the legal saga surrounding the ore reserves in Guinea, Rio Tinto has brought a claim in New York alleging that Steinmetz, his company BSG Resources (BSGR), and the Brazilian mining corporation Vale were guilty of “the theft of Rio Tinto’s valuable mining rights … through a scheme in violation of the Racketeer Influence and Corrupt Organisations Act”.

The move comes three weeks after the government of Guinea announced it would strip Guernsey-registered BSGR of the concession because the company had obtained them through corruption.

The concession was taken from Rio Tinto in 2008 and subsequently handed to BSGR, with the company saying it had secured the deal through a $165m (£98.5m) investment in the exploration of the area. BSGR then sold 51% of its prize to Vale for $2.5bn.

However, Guinea says it now has “precise and coherent evidence” that BSGR used intermediaries to pay bribes to Mamadie Touré, the wife of Lansana Conté, the ruler until his death in 2008.

Much of the evidence was gathered in the US by the FBI during an inquiry into the activities of Frederic Cilins, an associate of Steinmetz, and handed over to the government of Guinea.

Cilins was arrested in Florida last year after the FBI recorded a series of meetings with Touré, and faces four years in prison after pleading guilty earlier this year to obstructing a criminal investigation.

Unbeknown to Cilins, Touré was co-operating with investigators, who recorded their conversations.

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