Vale Files $2B Lawsuit Against BSGR Over Simandou

On April 23, a lawsuit was filed by Vale against BSG Resources Ltd. (BSGR) in the United States District Court for the Southern District of New York to enforce Vale’s arbitral award against BSGR, totaling more than US$1.2 billion — with interest and costs exceeding US$2 billion — which was issued on April 4 by an arbitral tribunal with the London Court of International Arbitration.

The award arose out of alleged fraud and breach of representations and warranties committed by BSGR, a company owned by billionaire Beny Steinmetz, to persuade Vale to purchase a 51% interest in concessions held by BSGR to develop an iron ore deposit in Simandou in the Republic of Guinea, and the adjacent Zogota concession.

Vale paid BSGR an initial price of US$500 million, and invested more than US$700 million, principally in Zogota, before the Guinean government withdrew the concessions when it found that BSGR obtained its rights to Simandou as a result of bribery of Guinean officials. Vale said the government found Vale had no connection to the corruption activities.

As featured in Womp 2019 Vol 05 - www.womp-int.com