Iron ore majors ramp up supply even as China faces challenges
Iron ore is one of the year’s worst performing major commodities, slumping by almost a quarter as China’s property crisis drags on.
Billionaire Beny Steinmetz, the founder and owner of a company embroiled in a long-drawn-out dispute with Vale (NYSE: VALE) over lost rights to the Simandou iron ore project in Guinea, said the Brazilian miner is trying to confuse the public.
The miner said on Monday that the Federal Prosecutors’ Office had closed an investigation into CEO Eduardo Bartolomeo, and other executives and former directors over alleged illegal practices related to the deal to explore the deposit.
At two billion tonnes of iron ore with some of the highest grades in the industry, Simandou is one of the world’s biggest and richest reserves of the steelmaking material.
Steinmetz claims Brazil’s Federal Prosecutors’ Office has not “definitively given up” on investigating the information he reported
Steinmetz claims the Federal Prosecutors’ Office has not “definitively given up” on investigating the information he reported. The businessman added that a second probe, launched by Rio de Janeiro prosecutors in March, was “alive, well and kicking.”
“By continuing to close their eyes and mislead investors, Vale continues a corporate governance policy that is rotten to its core,” he said on Tuesday.
The tycoon, who owns BSG Resources (BSGR), says that Vale’s “lack of leadership” is damaging shareholders. “It highlights the same toxic issues of governance that have caused tragedies such as the dam bursts which killed hundreds of people in recent years,” he said.
The move marks the latest attempt by Steinmetz to reopen an arbitration case in London that ordered his mining company to pay more than $2 billion to Vale for its investment in Simandou.
Vale has already obtained a worldwide freezing order against the mining magnate and it has asked a US court to enforce the award.
The case goes back to 2010, when Vale agreed to buy 51% of the iron ore licenses belonging to BSG Resources (BSGR), owned by Steinmetz.
Four years later, Guinea revoked both the Rio de Janeiro-based miner’s and BSGR’s rights over Simandou.
The decision followed a government probe that concluded they obtained their licenses through corruption, allegations that Steinmetz and BSGR have always denied.
Vale then filed a successful claim against its former partner company in the London Court of International Arbitration to recover an upfront payment to BSGR and money it invested in Guinea.
The figure requested and later awarded by a London arbitration court amounted to $1.25 billion plus interest and costs, totalling $2 billion.
Steinmetz was found guilty of bribing a public official to secure the deal and sentenced to five years in a Geneva court in January. He remains free.
