Iron ore price rises on firmer steel outlook, but trade tensions cap gains
Lower Chinese steel product inventory driven by robust exports also supported iron ore prices above $100/t.
Israeli diamond tycoon Beny Steinmetz will appear in a Geneva court in January to face charges of corruption and forgery relating to contracts in Guinea, Reuters reported, citing his lawyer.
The owner of BSG Resources, along with two aides, is accused of paying or having arranged to pay $10 million in bribes to one of the wives of former Guinean president Lansana Conté, who died in 2008, in order to obtain mining rights over the vast Simandou iron ore project.
The indictment was filed in 2019, and the opening of the trial was delayed due to the coronavirus pandemic, Reuters reported. Steinmetz has attended all of the pre-trial hearings in which he was asked to appear, and will attend the trial, his attorney said, according to the report.
The magnate reached a deal with Guinean authorities in February, which saw corruption charges against him lifted
“There are two charges, corruption and forgery. Both are categorically contested. The charges have no basis in fact or in law,” Marc Bonnant, a prominent Geneva lawyer representing Steinmetz, told Reuters on Friday.
The lawyer questioned whether the late Conte was married to Mamadie Toure, named as a spouse of the late president in the indictment, during that time.
“Beny Steinmetz never paid a cent to Mme. Mamadie Toure. Mamadie Toure was not the wife of the president (Lansana Conte) and she is not a public agent and therefore cannot be corrupted,” Bonnant said.
Claudio Mascotto, a Geneva prosecutor who began the investigation in the Swiss city where some of the alleged bribes transited, said last year he was seeking prison terms of between two and 10 years for Steinmetz and his two associates.
Development of Simandou – one of the world’s biggest iron ore deposits, containing billions of tonnes of high-grade ore – has been hindered by years of legal wrangling involving several big mining companies.
In 2008, Guinea’s former dictator Conté stripped Rio Tinto of its rights over two of the four blocks and handed them to BSGR for $160 million. Two years later, Steinmetz managed to sell 51% of its license to Vale for $2.5 billion.
Rio was able to keep the two southern blocks, but only after paying $700 million to the government, which guaranteed the miner tenure for the life of the mine.
The magnate reached a deal with Guinean authorities in February, which saw corruption charges against him lifted in exchange for giving up his remaining rights to Simandou.
Brazilian magazine Piauí revealed on Friday details of evidence gathered by private intelligence agency Black Cube against Vale.
The company was hired by Steinmetz to prove that Vale was aware of potential problems with how the rights to develop Simandou had been obtained, but “chose to close its eyes” as the billionaire tries to reverse a $2bn arbitration award to the miner.
Piauí reports Black Cube contacted former mining executives at Vale, offering fake job opportunities.
Economist José Carlos Martins, one of the most influential directors at Vale between 2004 and 2014, reportedly had a dinner in New York in February with Alexander Miller, an executive at Mersus Energy, an American company that was interested in doing business in South America.
After a few years out of the market, Martins had been probed by Mersus for an especially attractive job: consulting on a mining project in Peru, for which he would receive $10 million. Mersus executives wanted to have personal conversations with Martins before closing the deal.
According to Piauí, Mersus Energy did not exist, the consultancy proposal in Peru also did not exist and even the name and business card were fake and the man Martins spoke to for almost three hours was actually an investigator at Black Cube.
Piauí reports the meeting in the New York restaurant was recorded on audio and video – and the record of the dialogues shows that Martins ended up confiding that Vale really suspected that there were irregularities in the Simandou concession.
Martins’ lawyer David Rechulski said that his client simply fantasized the story because he wanted the $10 million consultancy they were offering him.
Vale did not comment.
