Simandou: Rio Tinto riposts to Beny Steinmetz's attack on the Polge de Combret affair
Simandou: Rio Tinto riposts to Beny Steinmetz's attack on the Polge de Combret affair
Rio Tinto, which is in dispute with Beny Steinmetz over the loss of its mining rights on blocks 1 and 2 on the Simandou iron ore project, has been stung by an attempt by the Israeli businessman to bring up another affair involving alleged bribery on its part for mining rights on blocks 3 and 4 at Simandou.
Israeli businessman Beny Steinmetz.
Israeli businessman Beny Steinmetz. ©Avimagen777/CC BY-SA 4.0
On 12 August, lawyers from law firm Kobre & Kim representing Israeli businessman Beny Steinmetz, wrote to judges at a New York Southern District court about an article published in the Financial Times on 28 July. Steinmetz has started discovery proceedings at the court in an attempt to obtain documents held by Australian mining group Rio Tinto and Brazil's Vale.
Ghosts from the past
The British daily revealed that Rio Tinto was in the middle of negotiating an agreement with Britain's Serious Fraud Office (SFO) to get it to end an investigation into a $10.5m payment by the group to French consultant François Polge de Combret in 2011. The consultant, who is close to Guinean president Alpha Condé, had been brought in to help Rio Tinto obtain mining rights on blocks 3 and 4 of the Simandou iron ore project (Africa Intelligence, 17/10/17). According to Kobre & Kim's lawyers, the paper's article showed that Rio Tinto had already given the SFO the documents which Steinmetz was trying to obtain via the discovery proceedings in New York. This meant that it could easily send them to him, they said, contrary to the claims made by the group's lawyers.
Steinmetz began the discovery proceedings in May to try to obtain proof that Vale had had doubts about the terms on which blocks 1 and 2 at Simandou had been awarded to his company, Beny Steinmetz Group Resources in 2008, before going into joint venture with it in 2010 (Africa Intelligence, 15/07/20). Steinmetz claims that Vale and Rio Tinto discussed these suspicions and that, therefore, the Brazilian group has no grounds now for claiming compensation from him for the loss of its rights on the site, since it had already known that there was a risk that this would happen.
Rapid ripost
Rio Tinto responded immediately. The day after Steinmetz's lawyers wrote their letter, the mining group's own lawyers (Kirkland & Ellis) also wrote to the judges of the New York Southern District court. They argued that, since the SFO's investigation concerned blocks 3 and 4 at Simandou, the documents it produced are not relevant to Steinmetz's legal action against Vale and Rio Tinto, which concerns blocks 1 and 2.
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