Simandou mine

Coordinates: 08°31′N 08°54′W / 8.517°N 8.900°W / 8.517; -8.900
Source: Wikipedia, the free encyclopedia.
Simandou Mine
Location
Nzérékoré Region
CountryGuinea
Coordinates08°31′N 08°54′W / 8.517°N 8.900°W / 8.517; -8.900
Production
ProductsIron ore
History
Opened2013

The Simandou mine is a large iron ore mine which is tied to one of the biggest mining corruptions in modern history.[1] The mine is located in the Simandou mountain range of southern Guinea's Nzérékoré Region. Simandou represents one of the largest iron ore reserves in the world, having estimated reserves of 2.4 billion tonnes of ore grading 65% iron metal.[2]

The

haematite and haematite-goethite mineralisations. The potential yield of the two deposits is estimated at 2.25 billion tonnes of high-grade iron ore.[3]

Corruption and controversy

The Simandou mine has known much turmoil and many mining rights disputes over the years. In 2008

Israeli diamond investor Beny Steinmetz.[4]

In March 2010 Rio Tinto and its biggest shareholder, Aluminum Corporation of China Limited (Chinalco), signed a preliminary agreement to develop Rio Tinto's iron ore project.[5][6]

On April 14, 2013, Frederic Cilins, an agent for Beny Steinmetz's company, was arrested in Jacksonville, Florida, as a result of an FBI investigation that began in January 2013. The investigation aimed to establish whether potential illegal payments made to obtain mining concessions in Guinea had been transferred to the United States in breach of the Foreign Corrupt Practices Act, which allows U.S. officials to pursue bribery cases abroad.[7] Cilin's detention followed covert FBI recordings of a series of meetings that allegedly showed he had plotted the destruction of documents which it is claimed could have shown the Simandou exploitation rights were acquired following the payment of millions of dollars in bribes to Guinea government officials.[8]

Cilins pleaded guilty in March 2014 and was sentenced to 2 years in jail.[9] No charges were brought against Steinmetz or BSGR.[10]

Back in 2010, BSGR sold 51% of their stake to

Vale (NYSE:VALE) for $2.5 billion.[11] However, after Vale had paid in $500 million, the government of Guinea led by President Alpha Condé launched an investigation into the legality of BSGR's license.[12] In April 2014 the Guinean government cancelled BSGR's mining rights in Simandou, and in May 2014 BSGR sought arbitration over the government's decision to expropriate the company's mining rights.[13] During the same month Rio Tinto filed suit against Vale and BSGR over the validity of their mining license. BSGR denied any wrongdoing[14] and the lawsuit was dismissed in 2015 in the US.[15] In November 2016, BSGR filed suit against Rio Tinto for compensation.[16]

In 2014, Vale filed a claim against BSGR at the London Court of International Arbitration to recover an upfront payment to BSGR and money it invested in Guinea. The court decided in favor of Vale and awarded it $2 billion.[17] In May 2020, BSGR filed discovery request documents at the court in New York based on transcripts of conversations with former Vale executives that were obtained by the Black Cube private intelligence company. [18] BSGR claims that the documents prove that Vale was aware of potential problems with how the rights to develop Simandou had been obtained, but chose to ignore them and proceeded to buy 51% of the iron-ore licenses. This could undermine Vale’s claims to compensation.[19]

In February 2019, BSGR came to an agreement with Guinea to withdraw the mutual corruption allegations as well as the arbitration case.[20] The agreement made BSGR surrender its rights to Simandou but allowed it to maintain an interest in the smaller Zogota deposit while giving Mick Davis, the head of Niron Metals, permission to develop it.[21][22]

In 2016, former Guinean mining minister Mahmoud Thiam[23] accused the head of Rio Tinto's Guinea operation department, Steven Din, of offering him a bribe in 2010 with the aim of regaining Rio Tinto's control over half of the undeveloped Simandou project.

In November 2016, Rio Tinto admitted to paying $10.5 million to

FRANCE 24,[26]
Guinean authorities knew about the Simandou briberies by Rio Tinto.

In 2017, the Serious Fraud Office (SFO), Britain's anti-fraud regulator, launched an official investigation into Rio Tinto's business and mining practices in Guinea.[27][28] Investigations into the Group's activity in Simandou were also launched by Australian authorities[29] and the US Department of Justice.[30]

Production

Mining operations were expected to start before the end of 2015.

Rio Tinto Limited plans to build a 650 km railway to transport iron ore from the mine to the coast, near Matakong, for export.[31] Much of the Simandou iron ore is expected to be shipped to China for steel production.[5]

Despite assurances, the mine is still not operational. The mine is expected to produce up to 95 MTpa of ore.[32]

See also

References

  1. ^ "SEC.gov | SEC Charges Rio Tinto plc with Bribery Controls Failures". www.sec.gov. Retrieved 2024-01-16.
  2. ^ "Faits et chiffres" [Facts and Numbers]. riotintosimandou.com. 2013. Retrieved 2013-06-14.
  3. ^ "Rio Tinto - Iron ore resources, Simandou, Republic of Guinea, Rio Tinto News Announcement RNS Number 4634V". 29 May 2008. Retrieved December 12, 2010.
  4. ^ "Rio says reaches accord with Guinea over Simandou". Reuters. 2017-04-22. Retrieved 2017-03-14.
  5. ^ a b "Joint venture for Simandou Guinea,Iron ore,Simandou project,Steel,Steel, BHP Billiton,Chinalco,Rio Tinto,World Bank, Agreement,Joint ventures,Port developments,Rail". Archived from the original on 2016-03-04. Retrieved 2015-06-25.
  6. ^ "Rio Tinto, Chinalco, agree to develop Guinea iron ore field". AFP. 19 March 2010.
  7. ^ "U.S. arrests man linked to Israeli tycoon in Africa graft probe". Reuters. April 15, 2013. Retrieved April 17, 2013.
  8. ^ "FBI arrest agent over bribery cover up claim in battle over $10bn mountain". The Guardian. April 16, 2013. Retrieved April 17, 2013.
  9. ^ Burgis, Tom (2014-07-25). "French businessman jailed for 2 years in Guinea mining case". Financial Times. Retrieved 2017-03-14.
  10. ^ Burgis, Tom (2015-02-10). "US deports man linked to BSGR probe". Financial Times. Retrieved 2017-03-14.
  11. ^ "Vale may settle Simandou lawsuit | MINING.com". MINING.com. 2014-12-05. Retrieved 2017-03-14.
  12. ^ "Buried Secrets". The New Yorker. Retrieved 2017-03-14.
  13. ^ "Guinea: BSGR seeks arbitration in Simandou dispute | African Energy". africa-energy.com. Retrieved 2017-03-14.
  14. ^ "Rio sues Vale and Steinmetz's BSG over Guinea mine". Telegraph.co.uk. Retrieved 2017-03-14.
  15. ^ "Steinmetz, BSG Resources Win Dismissal of Rio Tinto Lawsuit". Bloomberg.com. 2015-11-20. Retrieved 2017-03-14.
  16. ^ Burgis, Tom (2016-12-10). "BSGR demands compensation from Rio Tinto over African battle". Financial Times. Retrieved 2017-03-14.
  17. ^ ""Evidence" against Vale in Simandou case may hinder $2bn award". MINING.COM. 2020-05-25. Retrieved 2020-11-30.
  18. ^ "Mining Billionaire Gets Help From Ex-Spies in Bitter Legal Fight". Bloomberg.com. 2020-05-22. Retrieved 2020-11-30.
  19. ^ "Mining billionaire gets help from ex-spies in bitter legal fight". MINING.COM. Retrieved 2020-11-30.
  20. ^ "Mining Billionaire Ends Bitter Guinea Dispute After Months of Secret Negotiations".
  21. ^ "Israeli Billionaire Steinmetz's BSGR Settles Guinea Row, Looks to Zogota Iron Ore". Haaretz. 2019-02-25. Retrieved 2019-09-09.
  22. ^ Goodley, Simon (2019-02-25). "Beny Steinmetz settles dispute with Guinea over iron ore project". The Guardian.
  23. ^ "Rio Tinto Offered Bribe for Mine, Ex-Guinea Minister Says". Bloomberg.com. 2016-11-18. Retrieved 2017-03-14.
  24. ^ Hume, Neil; Burgis, Tom (2016-11-19). "Rio Tinto adviser's links to Guinea president raise bribery questions". Financial Times. Retrieved 2017-03-14.
  25. ^ "Rio Tinto set to quit Guinea iron ore project with sale to Chinalco". Reuters. 2016-10-28. Retrieved 2017-03-14.
  26. ^ "Audio recordings drag Guinea president into mine bribery scandal - France 24". France 24. 2016-12-01. Retrieved 2017-03-14.
  27. ^ Staff; Reuters (2017-07-25). "SFO says it is investigating Rio Tinto over Guinea operations". The Guardian.
    ISSN 0261-3077. Retrieved 2018-01-03. {{cite news}}: |last2= has generic name (help
    )
  28. ^ "UK's SFO says opens investigation into Rio Tinto Group". Reuters. 24 July 2017. Retrieved 2018-01-03.
  29. ^ AFP. "UK Serious Fraud Office probes Rio Tinto Guinea project". The Citizen. Retrieved 2018-01-03.
  30. ^ "UK Serious Fraud Office joins Rio Tinto 'corruption' inquiry". ABC News. 2017-07-25. Retrieved 2018-01-03.
  31. ^ "GUINEA: SIMANDOU PROJECT GAINS MOMENTUM". Railways Africa. Retrieved 2010-11-09.
  32. ^ "Simandou - Rio Tinto". Archived from the original on 2013-12-10. Retrieved 2015-06-25.
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