* BSGR denies charge, says government seeking to seize mine
* Former minister Thiam: allegations "absolutely false"
* Guinea reviewing mining deals signed during junta rule
By Saliou Samb
CONAKRY, Nov 5 Israeli billionaire Beny
Steinmetz's mining firm has been accused in a Guinean government
report of lavishing gifts on former officials and flying in cash
to win rights to one of the world's biggest iron ore deposits.
Privately owned BSG Resources dismissed the accusations as
laughable. It has said the West African country's government is
trying to seize assets it had planned to mine in a $10 billion
venture with Brazil's Vale.
Former mines minister Mahmoud Thiam, accused in the report
of accepting and distributing money, called the accusations
absolutely false and said they would be funny if they were not
Relations between Guinea and the mining firms that have
concessions there have been strained since the elected
government began a review of its mining code and of contracts
signed under military rule.
Guinea's government has asked BSG Resources and its partners
to respond to the accusations in the report, put together by a
government technical committee. If the responses are not
satisfactory, it could put their permits at risk, a source at
Guinea's mines ministry said.
Details of the accusations over BSGR's acquisition of mining
rights to the Simandou iron ore deposit were seen by Reuters on
Monday. They were first published in the Financial Times at the
The findings follow an investigation and interviews with
several officials of the former administration as well as former
BSGR staff in Guinea, the report said.
"During the period of the military regime in Guinea from
2009 to 2010, BSGR was engaged in a strategy to improve its
relations with decision-makers by making regular payments to
high military figures," the report said.
"These payments were often distributed in cash, carried into
the country in BSGR's private jet," it said.
"Minister Thiam repeatedly served as a BSGR conduit for the
purposes of these payments, receiving the money on arrival at
the Conakry airport and organising their distribution among the
people to whom they were destined," the report said.
Thiam, minister from 2009 to 2010, rejected those
accusations and that he had received other largesse.
"If the corruption allegations were not so insulting, I
would find them funny," Thiam told Reuters in an emailed
response. "To pretend that I indulged in such practices is
absolutely false," he wrote.
BSGR has said its licences were issued through due legal and
transparent processes and had been judged legal by an
international law firm working for the government.
"The idea of flying in private jets full of cash is
laughable. However, this unfounded attack on our reputation is
serious and we will use whatever legal means is required to
protect our reputation and our assets," a BSGR spokesperson
BSGR, which has a track record of operating in some of
Africa's toughest environments, brought in Vale to jointly
develop the Guinea blocks, but the Brazilian miner last month
announced it would put the project on hold, prioritising
developments closer to home.
At the weekend, BSGR accused Guinea's government of seeking
to "illegally seize" its assets through its probe.
President Alpha Conde came to power in 2010 with a promise
to clean up and strengthen Guinea's stagnant mining sector,
which has seen little investment due to misrule and corruption
despite Guinea's reserves of gold, diamonds, bauxite and iron.
(Additional reporting by Clara Ferreira-Marques in London;
Writing by Bate Felix; Editing by James Jukwey and Matthew