BENY STEINMETZ BSG Resources is exploring its options to ensure it is fully compensated for the billions of dollars of damage caused to it by Rio Tinto’s “unlawful conduct”
A US Southern District of New York court has dismissed on all counts the Racketeer Influenced and Corrupt Organisations Act (Rico) complaint laid by Anglo-Australian mining major Rio Tinto in August 2014 against iron-ore, diamond and ferronickel mining company BSG Resources (BSGR), BSGR founder Beny Steinmetz and other defendants, including Brazilian mining company Vale.
The court dismissed the case with prejudice on November 20, 2015.
In April 2014, Rio Tinto filed the Rico suit in the US state of New York against BSGR and Brazilian mining giant Vale, its joint venture (JV) partner in the Simandou iron-ore project, in Guinea. Rio Tinto claimed that BSGR and Vale had fraudulently dispossessed it of its mining rights – essentially through the alleged bribery and corruption of government officials – in 2008, when former President Lansana Conte’s government revoked Rio Tinto’s permit and transferred it to BSGR.
However, the New York court has upheld BSGR’s motion to dismiss the complaint on the grounds that the statute of limitations of four years had passed since the alleged offence took place in December 2008. It also rejected Rio Tinto’s argument that it had not discovered the conspiracy sooner owing to concealment by BSGR and its associates, and found that Rio Tinto had “failed to plead a pattern of racketeering activity”.
Commenting on the US court’s decision on the Rico complaint, law firm Mischon de Reya executive partner and legal counsel to BSGR James Libson said that, on the basis of the decision and what has been learnt in the process, BSGR was exploring its options to ensure it is fully compensated for the billions of dollars in damages resulting from Rio Tinto’s “unlawful conduct”.
Additionally, in November 2014, BSGR initiated legal action against President Alpha Condé and the government of Guinea for what the company believes are “corrupt practices” and “illegal activities” in terms of government having revoked BSGR’s mining licences for the Zogota and Simandou Blocks 1 and 2 iron-ore deposits, in south-east Guinea.
BSGR initiated arbitration proceedings regarding the issue with the government of Guinea with the International Centre for Settlement of Investment Disputes in 2014 and the matter is currently being heard by the International Chamber of Commerce in Paris, France.
Vale is also undertaking legal proceedings against its JV partner in the Simandou project, BSGR, in an effort to recoup part of the $1.1-billion it had allegedly lost owing to having been stripped of mining rights in Guinea. The matter is currently before the London Court of International Arbitration, in the UK.