Guinea ‘likely to strip rights to iron mine’

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Silvia Antonioli, David Rohde and Saliou Samb London and Conakry

A TECHNICAL committee in Guinea would recommend that the government strip BSG Resources and its partner Vale of the rights to exploit a giant iron ore deposit because the panel alleged that the former obtained the concession through corruption, sources close to the matter said last week.

The latest development in a saga surrounding one of the world’s largest mining deposits casts uncertainty over the future of the sought-after Simandou mine, which could help one of Africa’s poorest countries to prosper.

It also raises concerns over the position of Brazilian firm Vale, which, according to a source close to the company, has spent more than $1 billion (R10.7bn) in its Guinean venture and risks seeing its investment and efforts wiped away.

BSG vigorously denied the allegations of wrongdoing and said it believed the committee’s procedure was part of a predetermined and orchestrated plan to expropriate the company’s mining rights.

“The review has been conducted throughout without any respect for basic due process and procedural fairness,” a BSG spokesman said on Friday.

The committee’s report had no substance or sufficient evidence to support its recommendations, the spokesman added.

Vale, which has not been accused of any wrongdoing, declined to comment.

Nave Toure, the president of the technical committee, said it had not yet submitted its recommendations to the strategic committee, which would make a final decision.

He added that his technical committee did not have the authority to decide on handing mining rights to a third party.

“[The technical committee] does not have the authority to make recommendations that concern the reallocation of any mining title, as this is decided by the mining department.”

Under President Alpha Condé, Guinea launched a review in 2012 intending to shed light on certain mining concessions granted under previous administrations.

In a report prepared after months of hearings and investigations, Guinea’s technical committee would recommend that the government re-tender the rights on the northern portion of Simandou, three sources said last week.

The committee alleges BSG used corrupt practices to help obtain the concessions in 2008. BSG sold 51 percent of its Guinean assets to Vale in 2010 to created a joint venture, VBG.

The committee proposed that VBG, the holder of the titles, and “the companies that were the source of these corrupt practices, that is, BSG,” be barred from the procedure of re-awarding the titles, one source quoted a letter from the technical committee as saying.

A government spokesman said the technical committee’s work was based on serious and convincing evidence.

The strategic committee, which will make the ruling, is headed by Condé. – Reuters


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