Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Brazilian miner Vale SA said on Wednesday it has filed a lawsuit in the United States to force BSG Resources Ltd (BSGR) to pay it about $1.25 billion, as mandated by an arbitrator in a dispute over a joint venture in Guinea, plus interest and expenses.
Earlier this month, Vale said an arbitration court in London had ordered BSGR to pay $1.246 billion. The suit, filed in the U.S. District Court for the Southern District of New York, seeks payment of more than $2 billion when interest and expenses are taken into account.
The arbitration case stemmed from a dispute between Vale and BSGR, which is controlled by billionaire Beny Steinmetz, over Simandou, which contains billions of tonnes of high-grade iron ore, making it one of the world’s biggest iron ore deposits.
Vale has accused BSGR of fraudulently inducing it to buy a 51 percent stake in a joint venture to develop the mine, a concession later revoked by the Guinean government on charges the rights were obtained through corrupt means.
A government report at the time said Vale was not a participant in the corruption.
(By Gram Slattery; Editing by Paul Simao)
