Billionaire Beny Steinmetz’s mining company may be asked to pay as much as $1.2 billion to former partner Vale SA after choosing not to attend an arbitration hearing in London in a dispute over one of the world’s richest mineral assets, two people with knowledge of the case said.
The decision by Steinmetz’s BSG Resources Ltd. to back out of hearings earlier this year will probably cost him the case, the people said, asking not to be identified as the matter is confidential. BSGR felt it wouldn’t be “treated fairly,” according to a letter sent by its lawyers Mishcon De Reya to Vale’s legal representatives dated Jan. 31 and seen by Bloomberg News.
An unfavorable ruling would be the latest setback for the 61-year-old Steinmetz, who’s facing a string of corruption investigations around the world resulting from his failed investment in the giant Simandou iron ore deposit in Guinea. Yet, Vale would still face years of legal battles to enforce any award from the case.
The Brazilian mining giant filed its claim at the private arbitration court in 2014 after Guinea stripped its joint venture with BSGR of its rights to Simandou following a government probe that found licenses were obtained through corruption. It’s seeking the award to cover an upfront payment to BSGR and money it invested in the West African nation.
BSGR is confident it will prevail in the dispute, a company spokesman said. The company is unable to comment further given the confidentiality rules of the London Court of International Arbitration, he said. Vale didn’t respond to a request for comment.
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