FBI investigating Beny Steinmetz’s company BSGR after lucrative deal to extract iron ore from Simandou mountain range
Conakry, Guinea – In Conakry, a gleaming hotel looms over the filth of the city. Behind it a small coastal cove acts like a floating rubbish dump, collecting brightly coloured detritus from the murky Atlantic and distributing it in piles in stubbly black rock pools on the beach. A group of gangly young men sit by an abandoned fishing boat, looking despondently out to sea.
But in the gleaming, chandelier-lit hotel lobby it is easy to forget the scenery outside. Here, European, Australian and Brazilian mining executives, in jeans and suit jackets, sip rosé as they check emails. African businessmen huddle in groups, discussing shareholdings and the possibility of chartering planes to reach remote sites.
Businessmen think nothing of hiring private aircraft to reach Guinea’s abundant reserves of diamonds, gold, uranium, aluminium ore and bauxite, because the returns are unparalleled. The country is an almost textbook example of what some refer to as the “paradox of plenty”: it sits atop some of the most significant untapped mineral reserves in the world while its people live in squalor, without clean water, electricity, education or infrastructure.
In years past, during the dying days of Lansana Conté, the army general who ruled Guinea with an iron grip for almost all of hisa quarter-century tenure, an Israeli-French billionaire could be spotted similarly holding court at Conakry’s once popular Novotel.
Beny Steinmetz, one of the wealthiest men in the world, came here, sources say, with a clear mission. “Beny Steinmetz wanted to make sure he was the closest white man to President Conté,” said one former presidential aide of the president.
The tycoon also wanted, and successfully obtained, the rights to mine Simandou – a mountain range in Guinea’s remote south-east containing millions of tonnes of iron ore of the highest grade. According to some estimates, the ore from Simandou could generate around $140bn over the next 25 years, more than doubling the country’s GDP.
Until now Guinea’s riches have been exploited in a haphazard manner, one that benefited a tiny number of people in the country. Responsibility for this state of affairs lay with Conté, whose government was characterised not only by “state-sponsored abuses and repression”, but by “an increasing criminalisation of the state” in which assets were seized and exploited by his close associates, according tosays a Human Rights Watch report.
Steinmetz is reckoned to have amassed a personal fortune of more than $4bn. Some say he has more than twice that. What appeared certain, however, was that when his firm, BSGR, secured the rights to extract half the Simandou iron ore, he was about to became a lot richer.
The Conté regime had originally granted the rights to the Anglo-Australian company Rio Tinto in the 90s. In 2008 those rights were stripped from Rio Tinto and then – in what is said to have been one of the dictator’s final acts of government before his death – half were granted to BSGR.
The deal was notable not only because BSGR’s expertise was in mining diamonds, rather than extracting and exporting iron ore, but because the glittering prize of Simandou had cost the company so little: rather than paying the government of Guinea for the concession, it had invested $165m in an exploration programme in the area.
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