Leaked emails drag top Rio bosses into Guinea mine woes

SYDNEY (Reuters) - Top Rio Tinto executives discussed payments to a consultant working to smooth relations with Guinea, weeks after it announced a settlement allowing it access to one of the world’s largest iron ore deposits, according to internal emails.

Alan Davies, chief executive of Rio Tinto's diamonds and minerals division, poses with a rare pink diamond in Hong Kong September 6, 2013. REUTERS/Bobby Yip/File Photo

Rio reported the April 2011 email correspondence on Wednesday after an internal probe. It said it had notified authorities and suspended the senior executive in charge of the project at the time, head of energy and minerals Alan Davies.

There is no suggestion that officials or the consultant acted illegally, but the emails, which involve two former chief executives, are a blow to a group that has campaigned for transparency even in complex countries, and in projects as devilishly difficult as Guinea’s $20 billion Simandou mine.

U.S. authorities have investigated corruption in Guinean mining and a former representative of a rival miner, BSG Resources, was jailed for two years in 2014. BSGR denied allegations it paid bribes or ordered others to do so.

A U.S. investigation into Rio’s activities and any payments in Guinea, however, could complicate a move announced late last month to sell the project to the miner’s Chinese partner, Chinalco.

Guinea has been a focus for anti-corruption campaigners and funds, attracting cash from former British Prime Minister Tony Blair and billionaire George Soros to improve governance.

“The company did self report and people have been stood aside, but that doesn’t tell a lot about the ethical governance within Rio Tinto,” Transparency International Australia chairman Anthony Whealy said.

The U.S. and Britain in recent years have ratcheted up their anti-corruption rules.

The email exchange in question, between then chief executive Tom Albanese, iron ore head Sam Walsh and Davies discussed a $10.5 million payment to Francois de Combret, a former Lazard investment banker with a long history operating in Guinea.

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Rio has not confirmed the details, referring to an unnamed consultant and a “contractual payment”.

Davies did not answer his mobile phone when contacted by Reuters. Albanese did not immediately respond to messages. Walsh could not be immediately contacted for comment. Rio declined further comment.

It was not clear exactly what services de Combret was being compensated for, although one email referenced “his very unique and irreplaceable services and closeness to the (Guinean) President”, referring to Alpha Conde, elected in 2010.

In one exchange, Davies said he had spoken to de Combret.

“We have reached a final point, where Francois has requested a fee for services on securing [Simandou blocks] 3 and 4 of US$10.5m,” Davies wrote.

“Sam, I accept that this is a lot of money, but I also put forward that the result we achieved was significantly improved by Francois’ contribution,” he wrote.

“He vouched for our integrity when it was needed and helped bring us together when things were looking extremely difficult.”

In the correspondence, Walsh wrote there was “no question” de Combret “delivered sizeable value.”

De Combret was a classmate of Conde who worked at Lazard bank until 2005, according to a document on the World Bank’s International Centre for Settlement of Investment Disputes web site.

De Combret could not be reached for comment.

Albanese was ousted by Rio’s board in 2013 after investments in aluminum and coal that turned into billions of dollars of writedowns. He was replaced by Walsh, who retired in July.

Reporting by James Regan; Additional reporting by Jamie Freed and Sonali Paul; Editing by Clara Ferreira Marques and Richard Pullin