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French-Israeli businessman under house arrest in Israel over Guinea mining scandal

Image of the Simandou mine, courtesy of Rio Tinto

Billionaire French-Israeli businessman Beny Steinmetz has been placed under house arrest in Israel in connection with allegations of corruption related to Guinea's mining industry, a statement from his firm said Monday.


Steinmetz, 60, will remain under house arrest until January 2.

His BSG Resources (BSGR) mining company said in a statement earlier in the day that the allegations were part of an "obsolete" inquiry. “This development is in the aftermath of ongoing and what BSGR believes to be obsolete investigations surrounding bribery and corruption against BSGR.”

The company said the investigations were initiated by the Guinean government with international authorities from the United States, Britain and Switzerland.

A spokesman for Steinmetz in Israel said he would not comment at this stage.

BSGR described Steinmetz as an adviser to the company, which is headquartered in the Channel Islands and is the mining arm of Steinmetz’s business conglomerate. A company spokesman told Reuters that Steinmetz does not sit on BSGR’s board or have an executive role but that he is "the beneficiary of the foundation which owns BSG Resources”.

>> Read also: The French banker at the centre of a Guinean mining scandal

A government spokesman declined to say whether Guinea was directly involved in the Steinmetz case but said the government was committed to fighting corruption and would uphold the principle of judicial independence.

“The Guinean government will assume its responsibilities and will respect the commitment of the head of state to fight against corruption,” Damantang Albert Camara said.

A Guinean government panel reviewing the West African nation’s mining deals investigated how BSGR obtained the rights to the Simandou deposit, one of the world’s largest untapped iron ore resources, in 2008.

After his election in 2010, President Alpha Condé revoked the development rights to Simandou from BSGR, accusing the firm of having obtained the rights through corruption. Steinmetz obtained them in 2008 under the ruling military dictatorship, beating out Anglo-Australian mining giant Rio Tinto. Rio Tinto was able to win back the rights under the new regime in 2011. But this latest agreement and several of those involved are now in the crosshairs of the authorities of several Western countries.

Rio Tinto and BSGR have both launched legal claims over the rights to Simandou.

>> Read also: Audio recordings drag Guinea president into mine bribery scandal

In mid-November, following a report on the French investigative news website Mediapart, Rio Tinto admitted that it paid François Polge de Combret, a French banker and adviser to Guinean President Condé, a $10.5 million commission to obtain the rights to Simandou back in 2011. Following the revelations, the mining giant dismissed two top managers and alerted the US, British and Australian authorities.

The Guinean president has denied any wrongdoing.

Guinea’s former minister of mines, Mahmoud Thiam, was arrested in New York last week on suspicions that he was involved in bribery payments linked to Guinea’s mining industry.


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