Mining firm accused of lavishing gifts in Guinea

Tue Nov 6, 2012 5:25am GMT

By Saliou Samb

CONAKRY (Reuters) - Israeli billionaire Beny Steinmetz's mining firm has been accused in a Guinean government report of lavishing gifts on former officials and flying in cash to win rights to one of the world's biggest iron ore deposits.

Privately owned BSG Resources dismissed the accusations as laughable. It has said the West African country's government is trying to seize assets it had planned to mine in a $10 billion venture with Brazil's Vale.

Former mines minister Mahmoud Thiam, accused in the report of accepting and distributing money, called the accusations absolutely false and said they would be funny if they were not so insulting.

Relations between Guinea and the mining firms that have concessions there have been strained since the elected government began a review of its mining code and of contracts signed under military rule.

Guinea's government has asked BSG Resources and its partners to respond to the accusations in the report, put together by a government technical committee. If the responses are not satisfactory, it could put their permits at risk, a source at Guinea's mines ministry said.

Details of the accusations over BSGR's acquisition of mining rights to the Simandou iron ore deposit were seen by Reuters on Monday. They were first published in the Financial Times at the weekend.

The findings follow an investigation and interviews with several officials of the former administration as well as former BSGR staff in Guinea, the report said.

"During the period of the military regime in Guinea from 2009 to 2010, BSGR was engaged in a strategy to improve its relations with decision-makers by making regular payments to high military figures," the report said.   Continued...

Stockpiles of iron ore at the Rio Tinto Parker Point ship loading terminal in the Pilbara region of West Australia is seen in this handout photograph obtained February 11, 2010. REUTERS/Rio Tinto/Handout
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