Mining and Heavy Industries

Ex-Rio boss Walsh cooperating as AFP opens Guinea probe

Former Rio Tinto chief executive Sam Walsh will reportedly cooperate with the Australian Federal Police after it opened an investigation into an alleged bribery incident relating to the Simandou iron ore deposit in Guinea.

Emails leaked in late 2016 revealed an alleged US$10.5 million payment to former senior Lazard banker François Polge de Combret in 2011.

According to multiple sources, de Combret was assisting Rio in negotiations with Guinean president Alpha Condé, his former classmate at the Paris Institute of Political Studies.

Rio was bidding for the rights to mine the massive Simandou iron ore deposit.

The emails allegedly include discussions relating to the payment between Walsh – then Rio’s head of iron ore – along with then chief executive Tom Albanese and then energy and minerals executive Alan Davies.

Davies was sacked over the scandal in November last year, along with the mining giant’s legal affairs executive Debra Valentine.

Davies released a statement denying any legal activity, and slamming Rio for having “no grounds” to terminate his employment.

Rio announced Philip Richards as the replacement for Valentine on March 3, days before the AFP reportedly confirmed to the AFR that it had opened an investigation into the alleged bribery.

“In November 2016 Rio Tinto announced that it had engaged with Australian and other international authorities in relation to contractual payments made to a consultant providing advisory services on the Simandou project in Guinea,” the police reportedly said in a statement to AFR.

“The AFP is investigating allegations related to this matter.”

Walsh is said to be confident he will be absolved of any wrongdoing.

After serving as Rio’s iron ore boss, he became chief executive in 2013, and was replaced by Jean-Sébastien Jacques in July 2016.

“The company has said it will fully cooperate with any inquiries from the relevant authorities as indeed I will if requested to do so,” Walsh reportedly told The Australian after the AFP investigation was revealed.

He was also quoted in the AFR, saying he had deferred monies he was to be paid by Rio until the investigation was complete.

Walsh reportedly said it was his “firm belief that during my time with Rio Tinto I always acted lawfully and in accordance with my duties and this applies to the Simandou project”.

Rio said in its full-year results last month the Simandou saga “could ultimately expose the group to material financial cost”.

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