Diamond Magnate Beny Steinmetz Arrested in Guinea Bribery Case – by Scott Patterson and Rory Jones (Wall Street Journal – December 19, 2016)

http://www.wsj.com/

Israeli diamond magnate Beny Steinmetz was arrested Monday on suspicion of bribing government officials in Guinea, Israeli authorities said, widening the fallout from a long-running scandal involving one of the world’s richest iron-ore deposits.

The move is among the most dramatic yet in a saga related to the fierce competition to mine a vast iron-ore vein in Guinea’s Simandou mountain range.

Rio Tinto PLC, which once had the rights to Simandou, last month dismissed two executives and turned over evidence to law-enforcement authorities after emails became public detailing a $10.5 million payment the British-Australian company said it made to a man with close ties to Guinea’s government.

Israeli authorities said Mr. Steinmetz’s arrest was part of a continuing international investigation involving law-enforcement authorities in the U.S., Switzerland, Guinea and Israel. Allegations of wrongdoing have followed Mr. Steinmetz and BSG Resources Ltd., the mining arm of his family-owned conglomerate, since the company struck a deal to win the rights to Simandou from Rio Tinto in 2008.

The Guinea government, after an investigation, later stripped BSGR of its rights to Simandou. It was a major blow to Mr. Steinmetz, who made his fortune as a diamond merchant in Africa and had made a bold attempt to expand his mining operations in Guinea.

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