Guinea approves proposal to strip BSGR, Vale of mining permits

Guinea’s government has approved a report recommending that BSG Resources (BSGR) and its joint venture partner, Brazilian mining giant Vale, be stripped of two iron ore concessions, a Guinean government source said yesterday.

The recommendations were made in a report by a committee charged with reviewing the West African nation’s mining deals released last week, which accused BSGR of obtaining the rights by corruption. BSGR, the mining branch of Israeli billionaire Beny Steinmetz’s conglomerate, has denied the allegations and said it would seek international arbitration.

“The cabinet has approved the technical committee’s recommendations,” the source, who asked not to be named, told Reuters after a cabinet meeting yesterday.

The committee’s report recommended that Guinea withdraw the mining permit held by VBG, the joint venture between BSGR and Vale, in the giant Simandou iron ore deposit and cancel its Zogota mining concession. It also called for the government to exclude VBG from any future process to re-allocate the licences.