The consultant who was paid $US10.5 million by Rio Tinto for helping recover iron ore concessions in Guinea had “privileged” access to the African nation’s president and had “acted hand in hand with Guinean authorities” it has been claimed on French television.
Boardroom concern over the role played by French investment banker Francois de Combret in Rio Tinto’s negotiations through 2010-11 with Guinea over two Simandou iron ore leases have seen the company sack two of its most senior executives and self-report to market regulators in the United States, the UK and Australia.
On Thursday the Paris-based news channel France 24 went to air with a pair of recordings from 2012 which it claimed were a conversations between Mr de Combret and unnamed people involved in the two competing negotiations over the future of Simandou.
AFR Weekend asked Mr de Combret if he could confirm that the recordings are authentic and whether he had a comment on the France 24 report.
“I wish I could comment but I am sure you understand that it is not possible at this point,” the Swiss-based Mr de Combret replied in an email. “Thank you for you understanding. I wish you a good night,” he wrote.
Rio Tinto also declined to comment.
France 24 reported the context of one recording was that Mr de Combret was relating a conversation he had held with the Guinean president, Alpha Conde, about the Rio Tinto negotiation.
“Rio Tinto is a huge company,” the voice on the recording says. “But the president told them, ‘Listen, if there is no down-payment I’ll cancel the concession’. And he would have done it,” the person France 24 identifies at Mr de Combret says.
One result of the work Mr de Combret did for Rio Tinto was that the company paid $US700 million into the Guinean Treasury as part of a settlement that saw the miner recover two of the four mining concessions that cover the Simandou, the world’s best undeveloped iron ore resource.
The other result was that Mr de Combret was paid a fee of $US10.5 million on the successful conclusion of the negotiation. Internal concern in 2012 over the size and structure of that payment became discreetly public in August with publication on an internet forum called fnPaste of leaked emails between three senior Rio Tinto executives.
The internal investigation was triggered by emails between then chief executive, Tom Albanese, then iron ore boss Sam Walsh and then president of iron ore’s international operations, Alan Davies.
Mr Davies was one of two Rio Tinto executives dismissed on November 17 as a result of an internal review that continues and is being led by US law firm Kirkland & Ellis. Legal and Regulatory Affairs group executive Debra Valentine was the other. Rio Tinto found that both had “failed to maintain the standards expected” under its global code of conduct.
Mr Davies has claimed he was denied “due process” through the two-month progress to dismissal and has threatened “the strongest possible legal action” to defend his name, rights and entitlements.
Earlier this week The Australian Financial Review revealed Rio is facing a second probe by the Securities & Exchange Commission in regards to a failed coal project in Mozambique.
The second recording published by France 24 was described as a conversation between Mr de Combret and representatives of Beny Steinmetz, the Israeli billionaire who was the subject of racketeering allegations by Rio Tinto for the role his mining company played in the original appropriation of the Simandou leases by Guinea in 2008.
By 2012 Mr Steinmetz was in deep disagreement with Guinea after the two leases obtained by his company late in 2008 were removed by the Conde government on the basis that they had been fraudulently obtained.
In the second 2012 recording played by France 24, the voice claimed to be that of Mr de Combret says he is relaying a message from the president. After recommending negotiation with the government rather than legal action, the man in the recording offers his services.
“To set up this transactional solution, you must have an intermediary who has the confidence of both sides,” the man says. “As a gesture of goodwill, you would agree that his childhood friend – that is me – is the intermediary for both. It is proof of your goodwill since you are choosing his friend.”
The potential that Mr de Combret had a personal relationship with President Conde is not new. It is one of the reasons that he won company’s mandate from the group of four options offered for selection by sub-committee of Rio Tinto executive management group.
But in the wake of the turmoil triggered by the publication of the Rio Tinto emails, the Guinean government has claimed that Mr de Combret had access to high-level ministerial information and said it was not aware that he was working for the miner.
The latest France 24 report claims “several testimonies” that suggest “de Combret acted hand in hand with the Guinean authorities, who were aware that he was being paid”.
It would be a breach of the anti-corruption rules in each of Rio Tinto’s three core legal constituencies, Australia, the UK and the US, for payments to be made to someone working for, or with, a government.
The claimed confirmation that de Combret sought a mandate to represent Mr Steinmetz will likely also prove shocking to Rio Tinto management present and past. The settlement that earned Mr de Combret his Rio Tinto fee involved blocks 3 and 4 of the Simandou concessions. Since 2012 Mr Steinmetz has been in dispute with Guinea about blocks 1 and 2, both of which were originally owned by Rio Tinto.
When he asked for authorisation of Mr de Combret fee on May 10 2011, Mr Davies suggested that the recovery of the other two blocks in dispute would be made more possible if Rio Tinto stayed on good terms with the French banker.
“There is also a glimmer of possibility that we may be able to move ourselves into a useful position to 1 and 2,” Mr Davies reported. “Irrespective of the good advances I have personally made, I am extremely pessimistic without the invaluable services that Francois has provided.”