Beny Steinmetz: Mining tycoon in Swiss trial over Guinea deal

A bil­lion­aire French-Israeli dia­mond mag­nate, Beny Steinmetz, has arrived in court in Switzerland to face tri­al over alleged cor­rup­tion linked to a major min­ing deal in Guinea.

He has always denied his com­pa­ny, BSGR, paid mul­ti-mil­lion dol­lar bribes to obtain iron ore min­ing explo­ration per­mits in south­ern Guinea in 2008.

He trav­elled to Geneva from Israel for the two-week trial.

If con­vict­ed he could face up to 10 years in prison.

Steinmetz, 64, was pre­vi­ous­ly sen­tenced in absen­tia to five years in prison by a court in Romania for mon­ey laundering. 

Swiss pros­e­cu­tors say Steinmetz paid about $10m (£7.4m) in bribes, in part through Swiss bank accounts, to gain the rights to Guinea’s iron ore deposits in the Simandou mountains.

The area is believed to con­tain the world’s largest untapped iron ore deposits.

His lawyer Marc Bonnant says “we will plead his innocence”.

Copyright © 2016 Rio TintoSimandou iron ore site: Mining giant Rio Tinto has a large stake in the development

According to the pros­e­cu­tors, the bribes to Guinean pub­lic offi­cials were paid with the help of Mamadie Toure, the wid­ow of Guinea’s for­mer pres­i­dent Lansana Conte. They also allege that Steinmetz forged doc­u­ments linked to the deal.

The BBC’s Imogen Foulkes in Geneva says Ms Toure has been described as the star wit­ness for the pros­e­cu­tion, but her pres­ence in court is unlike­ly — she now lives in the United States. She has not yet com­ment­ed on this trial.

Mr Bonnant told Reuters news agency last month that Steinmetz had “nev­er paid a cent to Mme Mamadie Toure” and said she was not mar­ried to Lansana Conte. “She is not a pub­lic agent and there­fore can­not be cor­rupt­ed,” he said.

Despite its vast nat­ur­al resources, Guinea remains one of the poor­est coun­tries in Africa, and has gained lit­tle from the Simandou iron ore riches. 

Jackpot’ deal

Steinmetz secured the rights in exchange for an invest­ment of around $160m, but he then sold half of them on to Brazilian multi­na­tion­al min­ing com­pa­ny, Vale, 18 months lat­er for $2.5bn, net­ting a mas­sive profit.

At the time it was referred to as a “jack­pot” deal in the finan­cial press. But it also raised ques­tions about why the ini­tial rights were grant­ed so cheaply. 

Mo Ibrahim, the Sudanese tele­com bil­lion­aire and anti-cor­rup­tion cam­paign­er, asked at the time: “Are the Guineans who did that deal idiots, or crim­i­nals, or both?”

Steinmetz has always insist­ed he did noth­ing wrong. In a rare inter­view in 2012 he told the Financial Times that “peo­ple don’t like suc­cess” and it was nor­mal to pur­sue “oppor­tu­ni­ties in an aggres­sive way”.

Guinea’s gov­ern­ment stripped BSGR of its min­ing rights in 2014, cit­ing evi­dence of cor­rup­tion, which the com­pa­ny denied.