US finds adviser on Guinean mine guilty

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Joseph Ax New York

A former adviser to mining giant BSG Resources was sentenced in New York federal court on Friday to two years in prison for obstructing a criminal probe in connection with a bribery investigation in Guinea.

Frederic Cilins, a French citizen, pleaded guilty in March to one count of obstruction and admitted attempting to bribe Mamadie Toure, a widow of former Guinean president Lansana Conte, in an attempt to get her to leave the US to avoid questioning by federal authorities.

Cilins was charged as part of a US probe into potentially illegal payments made to Guinean officials to secure rights to half of one of the world’s largest untapped iron ore deposits for BSG Resources, the mining arm of Israeli billionaire Beny Steinmetz’s conglomerate.

BSG Resources has denied any wrongdoing. The investigation eventually prompted Guinean officials to strip the concessions from BSG Resources and its partner, Brazilian iron ore mining company Vale, after a government-appointed committee accused BSG Resources of obtaining the rights through corrupt means.

BSG Resources has accused officials of improperly trying to usurp its rights to the northern half of the Simandou mine. The company is seeking arbitration at the International Centre for Settlement of Investment Disputes.

Developing Simandou would offer an enormous boost to the Guinean economy, but the project has suffered delays because of disputes over the mining rights.

Last month, Guinea’s national assembly ratified an investment framework agreement with global mining house Rio Tinto, its Chinese partner Chinalco and the World Bank’s International Finance Corporation to raise nearly $20 billion (R210bn) to revive the project. First production from Rio Tinto and Chinalco’s southern half of Simandou, however, is at least four years away.

The government plans to open a new auction for the rights stripped from BSG Resources and Vale for the northern section. Guinean officials have said Vale did nothing wrong and encouraged the company to bid again.

At Friday’s hearing, Cilins apologised to US District Judge William Pauley for his actions. He was accused of offering to pay for Toure’s flight to leave the US, but she was working as an informant for the US government.

Pauley said his crime “strikes at the very foundation of the sound administration of justice”, but declined to impose a sentence of more than three years. – Reuters


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