Vale has threatened to leave the International Council on Mining and Metals (ICMM) as tensions rise between it and Rio Tinto over the brewing Simandou lawsuit.
The ICMMis made up of 22 mining and metals companies, as well as 33 national and regional mining associations.
Rio Tinto has accused both Vale and BSGR of corruption and bribery over the loss of Block 1 and 2 of Rio’s Simandou mining concessions 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.
Since the filing of the lawsuit, Vale has remained relatively quiet over the affair, stating that “the Technical Committee did not find any involvement by Vale in the fraudulent conduct relating to the acquisition of the mining licenses, which occurred more than one year before Vale made any investment in VBG, and recommended that the Guinean Government adopt measures to exclude VBG and BSGR, and BSGR’s affiliates, from the reallocation of the mining titles, but did not suggest that Vale be prohibited from participating in any such process.”
However its partner BSGR has threatened Rio Tinto, and Vale, over the lawsuit.
Now Vale is threatening to take its bat and ball home, and leave the ICMM in the wake of the scandal.
According to the Wall Street Journal, Vale CEO Murilo Ferreira is threatening to quit the global mining body.
The move would be a major shakeup for the body, and would signal the first major mining to leave the group since its inception in 2001.
A spokesperson for Vale confirmed a letter had been sent to the ICMM, but declined to comment further
A spokesperson from the ICMM added that “we are in talks about [Vale’s] participation”.