Ivanhoe Mines’ Kamoa-Kakula achieves record copper production in October
Copper production from Kamoa-Kakula now totals 345,042 tonnes for the year.
BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz’s empire, secured the rights to the vast Simandou iron ore project in Guinea through corrupt practices, an international tribunal has ruled.
The World Bank’s International Centre for the Settlement of Investment Disputes (ICSID) “forcefully” rejected the mining company’s claims against Guinea for billions of euros for having been stripped of its right to mine half of Simandou.
ICSID’s decision comes eight years after BSGR launched arbitration proceedings against the country, accusing the government of then President Alpha Condé of expropriation.
The company, which was placed into administration in 2018 due to mounting legal battles, has always maintained it did nothing wrong and was the victim of a conspiracy to seize its assets. That view was challenged by the West African nation’s government, which demanded compensation for “economic and moral prejudice” caused by BSGR’s “violations” of Guinean law.
ICSID sided with Guinea, maintaining that the miner had “acquired its rights through an extensive bribery scheme implemented primarily between 2006 and 2010.”
“The tribunal was convinced by the overwhelming evidence gathered by the Republic of Guinea, including contracts of corruption, evidence of payments of millions of dollars to various intermediaries, as well as audio and video recordings of key individuals involved in this extensive corrupt enterprise conducted on several continents,” the country’s government said in a statement.
TIMELINE: The battle for Simandou
Steinmetz was sentenced in 2021 to five years in jail by a Swiss court for bribing Mamadie Touré, a wife of Guinea’s late dictator Lansana Conté, in order to obtain the mining licence for the north portion of Simandou. Steinmetz’s appeal in this case is due to be heard in late August.
In its ruling last week, ICSID said there was evidence Touré had directly or indirectly received at least $9.42 million from BSGR between August 2009 and May 2012. It added that $5.23 million could be traced through wire transfers and cheques “for her services in securing permits”.
ICSID ordered the company to pay 80% of Guinea’s legal costs, amounting to $5.6 million.
At two billion tonnes in iron ore reserves and some of the highest grades in the industry (66% – 68% Fe, which attracts premium pricing), Simandou is one of the most easily exploitable iron ore deposits outside of Australia’s Pilbara region and Brazil.
Its development is also crucial China. The nation sees the project, described by Rio’s president of copper operations, Bold Baatar, as the “Rolls Royce of iron ore”, as an opportunity to wean itself off its reliance on Australia’s iron ore.
Guinea has said any mine developer must build a railway spanning the country, even though it adds significant costs and the route to port through neighbouring Liberia is much shorter.
Simandou is divided into four blocks, with 1 and 2 controlled by a consortium backed by Chinese and Singaporean companies, while Rio Tinto and Aluminum Corp. of China, known as Chinalco, own blocks 3 and 4.
At full production, the mine is expected to generate up to 100 million tonnes per year – with blocks 1 and 2 producing 60 million tonnes a year and Rio’s blocks yielding 40 million a year. At that point, Simandou would by itself be the world’s fifth-largest producer behind Vale (NYSE: VALE), Rio Tinto (ASX: RIO), BHP (ASX: BHP) and Fortescue Metals (ASX: FMG),.
Comments
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