August 7, 2013 / 8:14 PM / 6 years ago

Guinea could void BSGR mining permits if employees are convicted

CONAKRY, Aug 7 (Reuters) - Guinea could void Israeli firm BSG Resources’ (BSGR) mining permits if its employees who face charges linked to corruption investigations in the West African nation and the United States are convicted, a senior official said.

BSGR, the mining arm of Israeli billionaire Beny Steinmetz’s business empire, is battling Guinea over the right to mine one of the world’s largest untapped iron-ore deposits, known as Simandou.

The Guinean government alleges that BSGR bribed officials and Mamadie Toure, the wife of former President Lansana Conte, to win permits, or titles, to develop the northern half of the deposit, a charge the company has repeatedly rejected.

Three BSGR employees have been arrested - one in the United States and two in Guinea - by anti-corruption investigators.

“If these allegations are confirmed either by our own hearings or the judicial proceedings under way in the United States, the process of acquiring these titles is invalidated,” Nava Toure, head of a committee reviewing mining deals, said.

“As such, the committee would have the necessary elements to be able to request ... a cancellation of these titles,” he told Reuters on Wednesday.

The committee was set up by the government to review the legality of mining permits granted under longtime ruler Conte and the military junta that seized power following his death in late 2008.

It has made BSGR’s Simandou titles, under which the company is partnered with Brazilian mining group Vale, a priority for examination.

BSGR has accused the government of trying to use the process to confiscate its rights to Simandou.

U.S. authorities in January began investigating potential illegal payments made to obtain mining concessions in Guinea and transfers of those payments into the United States. The Foreign Corrupt Practices Act allows U.S. officials to pursue bribery cases abroad.

In April, Frederic Cilins, a French national named by Guinea’s government as an “agent” for BSGR, was charged in the United States with obstructing a criminal investigation, tampering with a witness and destruction of records.

Two BSGR employees, including the former vice president of the miner’s Guinean unit, Ibrahima Sory Toure, were arrested the same month in Guinea and charged with involvement in corruption. (Editing by Joe Bavier and Pravin Char)

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