NEW YORK/LONDON, (Reuters) – Documents obtained by U.S. authorities investigating mining corruption in Guinea show Israeli billionaire Beny Steinmetz’s mining company promised to pay millions of dollars in Africa to win valuable mining concessions.
Experts say evidence of corruption could throw into question the future of one of the world’s richest undeveloped deposits of iron ore.
Steinmetz’s BSG Resources (BSGR), the mining arm of Steinmetz’s sprawling business empire, is battling Guinea over a 2008 licence to develop the northern half of the Simandou deposit in the country’s south.
In court papers, the FBI described the documents as appearing to be contracts between BSGR and a company controlled by the wife of a Guinean official to procure mining concessions in Guinea.
The current Guinean government alleges that BSGR bribed officials and the wife of former President Lansana Conte to win the concession. A committee the Guinean government set up to review the legality of mining licences is due to report its findings on BSGR in weeks. No charges have been brought in Guinea.
BSGR denies allegations that it paid bribes for its concession. The firm says it operates to the highest standards of corporate governance and has criticised the review, saying it is designed to allow Guinea to renege on its obligations.
“Allegations of fraud in obtaining our mining rights in Guinea are entirely baseless,” a BSGR spokesman said on Friday. “We are confident that BSGR’s position in Guinea will be fully vindicated.”
BSGR would not comment on the authenticity of the papers.
On Sunday, FBI agents arrested BSGR representative Frederic Cilins in Florida, on charges of obstructing a criminal investigation, tampering with a witness and destruction of records.
Cilins’s lawyer did not respond to requests for comment.
Reuters has seen some of the documents, including what appear to be contracts between BSGR and a company connected with the wife of former President Conte.
Two of the contracts were signed in February 2008. In August that year, Conte stripped mining major Rio Tinto, which held the entire Simandou concession, of the right to mine its northern half. Conte accused Rio Tinto of moving too slowly. The concession was handed to BSGR four months later, just weeks before Conte’s death.
