The trust in charge of BSG Resources has brought ex-FBI director Louis Freeh to investigate Rio Tinto’s claims of corruption by the company to win Rio’s former Simandou tenements in Guinea.
Earlier this year Rio Tinto filed a legal complaint against BSGR and Vale, claiming the groups stole its mining rights for Simandou iron ore blocks 1 and 2 in Guinea.
In its filed complaint, Rio stated that negotiations between it and Vale started in 2008, and Rio provided the information regarding Simandou. It stated that “as Vale quickly surmised, gaining control of the Simandou deposit would strengthen Vale’s position in the world’s high-grade iron ore market, since the only other comparable source is Vale’s own Carajas Iron Ore Mine in Brazil”.
“Defendant Vale saw a golden opportunity to not only obtain that control, but to do so on the cheap, when Vale learned from Rio Tinto that Defendants Steinmetz and BSG Resources Limited (collectively with its named subsidiaries and affiliates, “BSGR”) were attempting to interfere with and steal Rio Tinto’s rights to the Simandou concession. Given BSGR’s reputation for corruption and bribery—well known among those active in the mining industry, including Vale—Vale was on notice that Steinmetz’s and BSGR’s efforts to misappropriate Rio Tinto’s rights included bribing various Guinean officials,” Rio said.
The miner went on to state that Vale and Steinmetz “entered into a conspiracy to misappropriate Rio Tinto’s Simandou rights” and used a campaign of bribery to do so.
It stated that Vale and Steinmetz’s BSGR then paid a $200 million bribe to the Guinean minister of mines, Mahmoud Thiam, for his assistance in “unlawfully securing Rio Tinto’s Simandou rights”
In the ensuing fallout Vale accused BSGR of bribery, and both companies lost concessions to the blocks, with the Guinean Government confiscating the rights.
Vale has also been threatening to leave the International Council on Mining and Metals due to rising tensions between the two major miners.
BSGR has also threatened to sue Rio Tinto and Vale if the miners continue to claim it carried out corrupt practices to obtain rights to the massive Simandou iron ore blocks.
Now BSGR is carrying out an internal investigation in to the claims of bribery, hiring Freeh and former U.S. senator Joe Lieberman to run the process, according to Bloomberg.
It is reported that BSGR head, Benny Steinmetz will likely help any internal investigation.