Mining and Heavy Industries

Rio’s Guinea drama deepens

Train carrying iron ore through the Pilbara in Western Australia, run by Rio Tintos Pilbara Iron. Photo: Rio Tinto

Rio Tinto is now facing a potential multi-billion-dollar lawsuit from rival Beny Steinmetz, as leaked emails indicated the ASX-listed miner may have impacted Steinmetz’s claims for iron ore tenements in Guinea.

BSG Resources, which is run by Steinmetz, an Israeli billionaire, reportedly sent a 14-page letter to Rio this week detailing its plans to sue Rio, unless Rio’s lawyers can deliver a satisfactory response.

The letter comes after leaked emails from Rio’s executives in May 2011, which relate to questionable payments made to Francois de Combret, a consultant who was helping Rio in negotiations with Guinean president Alpha Conde.

“These new developments are damning evidence against Rio Tinto demonstrating that Rio Tinto had a central role in bringing about BSGR’s loss of mining rights in Simandou, Guinea,” the letter states, according to multiple sources.

If BSG indeed takes Rio to court over the lost potential earnings, the result could be in the billions of dollars.

The formal threat of a lawsuit comes after Steinmetz made fiery comments upon the initial announcement, by Rio, that authorities had been contacted in several countries in relation to the payment of US$10.5 million to de Combret.

The Israeli billionaire said at that time – November this year – the leaked emails were evidence enough that his business had been unfairly stripped of its rights to Simandou – a huge iron ore resource – by the Conde Government in 2014.

“We have been fighting very powerful forces,” Steinmetz reportedly said in an interview with Bloomberg. “We all knew justice would prevail. I feel vindicated. We knew all along that we were right.

“Our asset was taken away based on lies,” he alleged. “It’s a big conspiracy against us, huge. They tried to paint themselves as nice and clean but they never wanted develop one ton of iron ore. We are the good guys.

“The people of Guinea are the biggest losers,” he reportedly said. “BSGR lost a lot of money, which it deserved to make, because BSGR invested a lot and took on a huge risk.

“This project has gone with the wind.”

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