Guinea mulls stripping Steinmetz of mining rights

BSG Resources: BSGR is prepared and ready to use the full authority of international arbitration to defend its legally acquired mining rights in Guinea.

Beny Steinmetz's BSG Resources Ltd. accuses the Guinean government of seeking to strip it and its Brazilian partner Vale SA (Bovespa: VALE5; NYSE: VALE) of their mining rights in the country. In a statement, BSG Resources says that what it calls actions by an "illegitimate government" and "illegal acts by the Government of Guinea, including the creation of Comite Technique de Revue des Titres et Conventions Miniers (CTRTCM) allegedly established to conduct an investigation into existing mining agreements but whose actions have defied all notions of due process, has in reality been entrusted with the task of preparing the expropriation of VBG’s assets."

BSG Resources cites Guinea's barring company president Asher Avidan from entering the country, based on what the company claims are "baseless grounds of 'national security' is the latest example of an illegitimate government resorting to harassment to make it impossible for BSGR and its VBG joint venture from exercising their contractual rights legitimately awarded in Guinea."

BSG Resources and Vale's joint venture, VBG, is planning to develop a $10 billion iron ore mine at Simandou in Guinea, and BSG Resources added that it will spend an additional $1 billion on rail infrastructure projects in the country. The new Guinean government has been conducting a review of mining contracts signed by the previous government. VBG acquired rights to the part of the Simandou deposit in 2008 after Australia's Rio Tinto Ltd. (NYSE; LSE; ASX: RIO), was ordered by the government to give up part of its license area. Vale agreed to buy 51% of the project for $2.5 billion in 2010.

Guinean government spokesman Albert Damantang Camara told "Bloomberg" in response that the ban on BSG Resources' president from visiting Guinea was a security matter and was unrelated to mining or the company. He added that the allegations that the government was seeking to strip VBG of its mining rights were “totally unfounded” and not worthy of comment.

BSG Resources concluded, "BSGR is prepared and ready to use the full authority of international arbitration to defend its legally acquired mining rights in Guinea."

Published by Globes [online], Israel business news - www.globes-online.com - on March 27, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013=

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