Rio Tinto Instructed Private Investigators To Dig Up Allegations Against BSGR

BSG has jumped on the emails Rio Tinto says it found in August that proved the company had paid an associate of Guinean president Alpha Condé US$10.5 million.

In the letter, it adds its own complaints to those already in the public eye, accusing Rio Tinto of intimidating workers with low-flying helicopters and private investigators.

“[The chain] is compelling and damning against Rio Tinto” the letter said.

“It also puts in context Rio Tinto’s earlier attempts to take blocks 1 and 2 from BSGR. In essence, the corruption by Rio Tinto in 2010 and 2011 in relation to the Government of Guinea, was a continuation of Rio Tinto’s ever increasingly desperate attempts to get BSGR out of Simandou.”

BSG has been accused of bribery itself.

The private company, controlled by diamond billionaire Beny Steinmetz, received blocks 3 and 4 of the massive Simandou iron ore resource in 2008 after the former Guinean president Lansana Conté ruled Rio Tinto was being too slow.

BSG sold 51% of the holding to Vale (BR:VALE3) for $2.5 billion in April 2010.

When president Condé was elected in December 2010 he promised a review of the Simandou deals, and subsequently cancelled BSG’s rights over the site after deciding it had bribed the former government.

Other accusations from the BSGR letter include:

“As early as August 4, 2008, Rio Tinto instructed a private investigator to compile a “brief on Steinmetz”. Rio Tinto also indicated that it would try to get the investigator’s sources to “give their thoughts on avenues/approaches that Rio should be exploring to address the concession issue”.”

“In January 2009, Mahmoud Thiam was appointed as the minister of mines in Guinea. Soon after Thiam’s appointment, a delegation from Rio Tinto met with him to try to persuade him to overturn the previous government’s decision to withdraw its mining rights in blocks 1 and 2.

The delegation made very serious allegations of corruption against BSGR, although they did not provide any evidence in support of their allegations.

These included that BSGR was a corrupt organisation involved in arms trading, that Beny Steinmetz’s French passport had been revoked on account of his connection to corruption, that no major bank was prepared to do business with BSGR and that the company had no experience in the mining sector.”

Rio Tinto has reportedly said that if a claim is brought to court, it will defend itself robustly.

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