Associate of Beny Steinmetz Jailed Over Guinea Mine Scandal
The mining scandal involving BSG Resources and Beny Steinmetz continues.
A former advisor to the company was sentence on Friday to two years in Federal prison for obstructing a criminal probe in connection with a bribery investigation in Guinea.
Frederic Cilins, a French business man, pleaded guilty to one count of obstruction and admitted attempting to bribe Mamadie Toure, a widow of former Guinea President Lansana Conte. The case alleges Guinean officials were compensated by Cilins for granting BSG Resources (BSGR) rights to Simandou, a world-class iron-ore deposit in the West African nation.
In a taped phone conversation, Cilins is heard telling Toure: “That has to be destroyed very urgently,” in response to documents tied to the alleged payments.
In addition of the two years in prison, the sentence includes three years of supervised release and a maximum fine of $75,000.
“I would like to apologize to the court for what I have done, and for the pain my family has endured,” Cilins said in a brief statement to the courtroom.
While BSGR has refuted any wrongdoing, the arrest of Cilins prompted Guinean officials to strip the company and its partner Vales SA of concessions to the Simandou mine. The company is seeking arbitration at the International Center for Settlement of Investment Disputes.
BSGR obtained rights to the Simandou mine in 2008 and sold a 51 percent stake in concession to Brazil’s Vale SA in 2010.
The company described the arrest as “wrongful” and has filed a lawsuit to reverse the revocation. Vale maintains any wrongdoing in the scandal occurred before it became involved in the project.
Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”