Iron ore and Coal

Vale executives investigated in Brazil over Simandou deal

Vale executives investigated in Brazil over Simandou deal
Mining News Pro - The police in Rio de Janeiro, Brazil, will investigate Vale CEO Eduardo Bartolomeo, and other executives and former directors over the deal to explore the giant Simandou iron-ore mine in Guinea, as newspaper Valor Econômico first reported.

The case goes back to 2010 when Vale agreed to buy 51% of the iron ore licenses belonging to BSG Resources, owned by the Israeli billionaire Beny Steinmetz.

Four years later, Guinea revoked both the Rio de Janeiro-based miner and BSGR’s rights over the massive iron ore deposit.

The decision followed a government probe that concluded they obtained their licenses through corruption, allegations that Steinmetz and BSGR have always denied.

Vale then filed a successful claim against its former partner company in the London Court of International Arbitration to recover an upfront payment to BSGR and money it invested in Guinea.

Steinmetz was found guilty of bribing a public official to secure the deal and sentenced to five years in a Geneva court in January. He remains free.

After hiring the private intelligence agency Black Cube to investigate Vale former executives, Steinmetz presented on October 5 a criminal referral at the Attorney General’s Office in Rio de Janeiro.

In the document, he alleged crimes of influence peddling and active corruption in an international commercial transaction, beginning in 2011, involving Vale executives and financier George Soros.

Another criminal referral was presented at the Public Ministry of the State of Rio de Janeiro on October 9, 2020. According to this representation, Vale executives believed that the concession of the Simandou mine would have involved paying bribes and even so, they proceeded with the deal.

The Rio de Janeiro police decided to investigate Vale’s executives based on the second crinimal referral.

Prosecutors also determined that the police take the testimony of Bartolomeo, who at the time of the deal was Vale’s logistics director, and former executives José Carlos Martins, Alex Monteiro, Eduardo Etchart and Eduardo Ledsham.

Ledsham is the current president of Bahia Mineração (Bamin), a Brazilian subsidiary of the ERG group.

“The investigations underway in Brazil already show that Vale knew about the risks of doing business in Africa and went ahead without scruples. This proves that when Vale victimizes itself, in fact, it embarked on deliberate blindness,” Steinmetz said in an email to MINING.COM in February.

Vale have not responded to requests for comment on the decision.

At two billion tonnes of iron ore with some of the highest grades in the industry, Simandou is one of the world’s biggest and richest reserves of the steelmaking material, but it has a controversial past.

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