Guinea contemplates seizing Simandou asset
The first two paragraphs of yesterday's article on Mineweb say it all really:
“Relations between Israel’s wealthiest person Beny Steinmetz and the mineral-rich African nation of Guinea have deteriorated to such an extent that neither the billionaire nor any of his representatives plan to attend a final hearing into the ownership of a prized iron-ore asset… Steinmetz was once close enough to a former leader of the country to invite him to his daughter’s 2009 wedding [but] his BSG Resources Ltd. has more recently been fighting for the release of two executives from a prison in the capital Conakry.”
It gets worse for BSG - this process will culminate in an imminent hearing that has the power to strip the company of the asset, named Simandou, completely. The project is a joint venture between BSG and Vale known as VBG; VBG (51% Vale) has stated a willingness to appear at the Conakry hearing. No-one from BSG will be going to the country.
Fresh from a tortuous, disputed election process that has only just wound up (subsequent to which the opposition remain sore, perhaps justifiably, that their appeal that the Supreme Court annul the results was unsuccessful), the Guinean powers that be are turning their guns on BSG. Plans to build $10 billion worth of rail, port and mine infrastructure have been iced after what was initially a Guinean review into the acquisition of the rights by BSG widened to at least four other countries. Even the US are involved now, with a Grand Jury investigating allegations of bribery.
As the Mineweb piece continues:
“Guinea is seeking to make a ruling on the license review by early next year, a person with knowledge of the matter said in October. The nation ranked 150 out of 177 in Transparency International’s 2013 corruption perceptions index.
The country plans to preserve Vale’s interest in Simandou, President Alpha Conde, who became Guinea’s first democratically elected president in 2010, said in a Nov. 25 interview in Abu Dhabi.
“It’s out of the question to hurt Vale; at the same time, the law should be obeyed, so we’ll have to find a solution,” he said. Conde declined to comment on whether the concession would be offered to bidders again, or given back to Rio Tinto Group should BSGR’s contract be canceled.
Rio Tinto, the world’s second-biggest mining company, was stripped of two of the four blocks of land making up the Simandou deposit in 2008. Rights to the ground were subsequently transferred to BSGR, which sold 51 percent of its stake to Vale in 2010 in a deal valued at as much as $2.5 billion. Rio said in August it would be interested in regaining control of the disputed iron-rich ground.”