Steinmetz’s BSGR Queried on Payments to Guinea Officials

Guinea Trip
Guinea Mining

Guinea asked BSG Resources Ltd., billionaire Beny Steinmetz’s mining company, to provide details of gifts and payments to officials as a review into ownership of one of the largest untapped iron-ore deposits nears completion.


The final hearing of a government committee probing how BSGR acquired the ground will be held Dec. 10 in the capital Conakry, according to a letter sent to BSGR’s venture in Guinea this week and seen by Bloomberg News. It asks BSGR to clarify responses to allegations made last year, and denied by BSGR, that

payments and gifts were given to senior government and military officials from 2005 that helped it to obtain the site.


BSGR has described the review as part of a smear campaign by Guinea and an attempt to “expropriate illegally” its mining rights, including the Simandou deposit. 


Steinmetz, Israel’s richest person with a net worth of about $7.7 billion according to the Bloomberg Billionaires Index, was interviewed by Swiss authorities last month at the request of Guinea, according to his lawyer Marc Bonnant, as part of a widening probe involving at least five countries.


The Guinean government “can make the same allegations over and over again but it doesn’t change the answers that we have already given them,” BSGR said today in a statement. “This is their latest attempt to damage our reputation in an effort to illegally seize our private property.”


Guinea is seeking to make a ruling on the license review by early next year, a person with knowledge of the matter said last month.


Rio Stripped

Rio Tinto Group, the world’s second-biggest mining company, was stripped of two of the four blocks of land making up the Simandou deposit in 2008. Rights to the ground were subsequently transferred to BSGR, which sold 51 percent of its stake to Brazil’s Vale SA (VALE5) in 2010 in a deal valued at as much as $2.5 billion. Rio said in August it would be interested in regaining control of the disputed iron-rich ground.


The government’s letter expands on allegations initially put to the company last year and asks for a response within eight days of next month’s hearing. It asks for details of any gifts or payments made to the now deceased President Lansana Conte, senior military figures, former Mines Minister Mahmoud Thiam, who was once an adviser to UBS AG and Bank of America Corp., and Conte’s fourth wife.


Since the original 25 allegations were detailed in a letter to BSGR dated Oct. 30, 2012, the company and its operations in Guinea have attracted the attention of authorities in the U.S., Switzerland, France and Guernsey.


U.S. Probe

In April, a U.S. grand-jury investigation began looking at whether bribes were paid by a man linked to BSGR, Frederic Cilins, to the wife of former president Conte, Mamadie Toure. Prosecutors say Cilins and others visited Toure in Guinea when Conte was in office to offer $12 million to her and senior members of the government for their help in securing the Simandou mining rights.


Cilins has pleaded not guilty. He was denied bail in July on the grounds that he presented a “serious risk of flight” and is awaiting trial on charges that he interfered with the grand-jury probe.


The government’s letter repeatedly chides BSGR for providing “vague and imprecise” answers to questions from the Technical Committee set up last year to review ownership of Guinea’s mineral deposits. It demands BSGR clarify its relationship and interactions with three individuals: Cilins, Toure and Thiam.


BSGR Responses

The committee’s letter also requests that BSGR provide details of what gifts were offered by Cilins to Guinean officials and their loved ones. It said it was “surprised” by BSGR’s responses concerning Toure. In particular, the committee said it’s interested in BSGR’s statement that Toure wasn’t a spouse of Conte.


The company’s previous responses to allegations that Steinmetz met Conte close to his death at a hospital in Geneva and that he’d discussed the project with Glencore Xstrata Plc were also labeled as vague and imprecise. BSGR has said Steinmetz only met Conte in Conakry and that he had no contact with Glencore relating to Guinea, nor offered to sell mining rights to the Baar, Switzerland-based company.


On this point BSGR was asked to provide details of all contact between Steinmetz and Conte, including naming the other participants at the meeting in Guinea. The government also requested records and dates of meetings between Steinmetz, a former BSGR executive and representatives of Glencore on matters not relating to Guinea.


Glencore declined to comment today.


Thiam’s Role

The letter references allegations that BSGR provided Thiam with the use of a corporate business jet and paid for hotel rooms, including the Mandarin Oriental Hotel in Geneva. It asks the company to explain the direct or indirect role Thiam played in its operations in Guinea.


The government also says in the letter that BSGR never sought its approval for the sale to Vale.


BSGR said in March that Guinea was preparing to remove mining rights from its venture with Vale, which plans a $10 billion mining operation at Simandou.


Steinmetz told Geneva’s prosecutor he wasn’t involved in bribery or corruption, Bonnant told Bloomberg News Oct. 30. The billionaire declined to give further information because he objected to Guinea’s involvement in the investigation, the lawyer said. His Geneva home and a jet were searched by Swiss police in August following a request by Guinea’s government.


Steinmetz amassed his fortune initially in the diamond trade, according to his personal website. Working from a base in Antwerp, Belgium, in the 1980s and 1990s, he joined forces with his brother Daniel to conduct business deals in South Africa, Namibia, Botswana andIndia. Beny Steinmetz and his family moved to Geneva in 2010, according to the website.


In addition to diamonds, mining and mineral assets, the Steinmetz family has interests in real estate, financing and the oil and gas industry.


To contact the reporters on this story: Jesse Riseborough in London; Andy Hoffman in Geneva at


To contact the editor responsible for this story: John Viljoen at

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