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.
Brazil’s Vale (NYSE: VALE), the world’s top iron ore producer, is urging a US court to force billionaire Beny Steinmetz to respond to the company’s efforts to track down assets and obtain the $2 billion it was awarded last year as a result of arbitration.
Steinmetz is the founder and owner of BSG Resources, a company embroiled in a long-drawn-out dispute with Vale over lost rights to the massive Simandou iron ore project in Guinea.
The Israeli magnate said in May 2019 that he had evidence that will help him reverse the London Court of International Arbitration award to Vale of $1.25 billion plus interests and costs, totalling $2 billion.
The diamond mogul asked the New York-based federal court to force Vale to provide certain documents, which could allegedly prove the Brazilian miner was aware of potential problems with how the rights to develop Simandou had been obtained.
The owner of BSG Resources, along with two aides, is facing accusations 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.
Brazilian magazine Piauí revealed last week that Steinmetz hired private intelligence agency Black Cube to prove Vale had full knowledge of the process through which the companies gained access to Simandou.
As part of the investigation, the detectives found that a former director at Vale between 2004 and 2014 reportedly said in a dinner he suspected irregularities in the Simandou concession.
Piauí reported such meeting, held in a New York restaurant, was recorded on audio and video and could be used in court.
Vale has repeatedly said Steinmetz’s request for documents is just a “transparent publicity stunt.”
It has also argued that Steinmetz can’t just sit out the fight and should be forced to cooperate, Law360.com reported.
Vale has even alleged that BSGR fraudulently funneled $500 million it received from the company within the framework of their former Simandou partnership into some of Manhattan’s top real estate agencies.
Steinmetz is set to appear in a Geneva court in January, where he would face charges of corruption and forgery relating to his deals in Guinea.
This week, the mogul called once again for an investigation against Vale.
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.
