Steinmetz's BSGR seeks to reopen $1.25 bln Guinea ruling
Billionaire Beny Steinmetz’s BSG Resources Ltd (BSGR) is
seeking to reopen an arbitration case that ordered it to pay $1.25 billion to
Brazilian minder Vale SA over an abandoned mining joint venture in Guinea.
BSGR has filed documents, seen by Reuters, with a U.S. court
which it said shows that Vale was aware of potential bribery or “red flags”
when the companies partnered to develop Simandou, one of the world’s biggest
iron ore deposits containing billions of tonnes of the steelmaking ingredient.
The companies are locked in a long-running legal dispute
over the joint venture, which was created in 2010 but has since been abandoned.
Simandou remains undeveloped.
“The Vale Board should assume full responsibility for their
misconduct, publicly clear BSGR of all wrong doing and compensate fully for the
commercial value of the loss to BSGR, which could run into billions of
dollars,” Steinmetz said in an emailed statement.
Vale has accused BSGR of fraudulently inducing it to buy a
51 percent stake in the joint venture to develop the mine, a concession later
by the Guinean government in 2014 after it said it had evidence BSGR obtained
the rights through corruption.
Vale on Friday denied BSGR’s accusation, saying it was
confident that any court or tribunal would find it in the right.
“Vale is confident that the effort will continue to be
rejected by any court or tribunal considering the full record of Vale’s
extensive diligence efforts and the extraordinary means that Steinmetz
undertook to conceal his fraud from Vale,” the Brazilian company said in a
statement.
Guinea’s President Alpha Conde at the time said Vale was not
involved in, or aware of, the corruption.
BSGR, which went into administration in 2018, has denied any
wrongdoing in obtaining the Simandou rights. It walked away from the project
last year as part of a settlement with Guinea’s government in which both
parties agreed to drop outstanding legal action. [nL5N20K1QG]
Vale filed a U.S. lawsuit in April 2019 to force BSGR to pay
it about $1.25 billion, as mandated by a London arbitrator in the dispute, plus
interest and expenses, amounting to a total of more than $2 billion.
[nL1N2260CM]
The lawsuit is still active.
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