Mick the Miner and a VERY murky deal in West Africa
Tory grandee could profit from iron ore in Guinea after corruption row with billionaire is settled
THE chief executive of the Tory party is set to benefit from a £40m mining deal in one of the world’s most turbulent and corruption-ridden countries.
Sir Mick Davis is in line to be granted a concession to mine a potentially lucrative iron ore deposit in Guinea, a poverty- stricken state in West Africa, through his company Niron, which is part-owned by a secretive firm based in the Bahamas.
In his former life as the boss of Xstrata, in its day one of the most prominent mining companies in the City, a deal like this would have been all in a day’s work. Like his peers in the global mining industry, Davis was used to doing business in some of the most troubled corners of the planet, where governance codes are often unknown.
But that realpolitik sits uncomfortably with his current role as the Conservative Party’s chief executive and treasurer, where he is expected to be beyond reproach.
Any deal he does will attract attention. But this one is controversial because the path to his potential profits at the Zogota mine, thought to be one of the richest in the African state, is being cleared as a result of an agreement between the government of Guinea and the Israeli tycoon Beny Steinmetz’s firm BSGR. Steinmetz ( pictured with his wife
Agnes), whose wealth is estimated at $1bn, has been locked in a long-running dispute with Guinea, which has accused BSGR of bribery and corruption.
Under the arrangement that will pave the way for Davis to cash in, Guinea has agreed to drop its claims in an arbitration dispute against BSGR in Paris. It has also agreed to withdraw from a criminal investigation against Steinmetz in Switzerland.
If it goes ahead as planned, Davis could end up as a co-investor with Steinmetz.
Davis – known in the City as Mick the Miner – is a major donor to the Conservatives, having handed over £5m. He was knighted in 2015 by David Cameron for his work on the Holocaust Commission. As treasurer of the party since 2016 and chief executive since 2017, he is in charge of raising money and fighting elections, including yesterday’s council ballot.
It is in the nature of the mining industry that firms have to operate in war-torn and corrupt countries. Davis is not accused of any wrongdoing and is not responsible for Guinea agreeing to back away from its corruption claims against BSGR.
However, given his position in the Tory party, the fact that he stands to benefit in the aftermath of the agreement will raise eyebrows.
So, too, will the fact that the firm he is using to exploit the iron ore is partowned by a Bahamian outfit. As will the prospect of him being a co-investor with Steinmetz, whose company, BSGR is under investigation in several jurisdictions, including the US. A spokesman for Davis and Niron said: ‘Neither Sir Mick Davis nor Niron are party to the agreement to which you refer. ‘Niron believes that the Zogota deposit can be brought into production on an accelerated timetable, thereby helping to unlock the potential of Guinea’s rich resources for the benefit of all stakeholders, including the government and people of Guinea.’ As for BSGR, its history in the country has been difficult. In 2014 the president, Alpha Conde, banned it from access to the iron ore deposits after a government committee found the rights were obtained by bribery. Last month, BSGR was ordered by a London arbitration court to pay £970m to an iron ore producer in connection with a bribe offered to Mamadie Toure, the widow of the then Guinean president, to help obtain mining rights in 2008.
BSGR told the Mail it strongly maintains its innocence of any wrongdoing and that there is no validity to the arbitration award.
Under the deal with BSGR, Guinea will drop all opposition to Steinmetz and waive claims it has made to corruption investigators. The country will withdraw from criminal proceedings targeting Steinmetz in Switzerland and has promised not to make ‘disparaging remarks’ against him for ten years.
The settlement, seen as part of an investigation by anti- corruption campaign group Global Witness, reads: ‘Guinea waives its status as complainant party as part of the criminal proceedings pending in Switzerland.’
Once the dispute between Guinea and Steinmetz is settled, Davis’s company Niron will be free to develop the Zogota mine.
If that is developed successfully, Steinmetz may be awarded a stake in Davis’s company, making the pair co-investors. Niron is in discussions to agree a revenue-sharing deal with BSGR.
MPs have criticised the arrangement. Margaret Hodge MP, an anti- corruption campaigner, said: ‘It beggars belief that the Tory chief executive is doing business with a billionaire accused of corruption.’
Rupa Huq MP, chairman of the All-Party Parliamentary Group on Anti-Corruption, said: ‘It is very concerning. If Theresa May really wants to challenge “burning injustices” she could start by looking at her own senior staff.’
Niron, founded in 2018, is partowned by a secretive firm based in the Bahamas, according to UK company documents.
The agreement is dependent on financial arrangements with Niron being formalised. The current framework will see Niron pay $50m (£38.8m) to Guinea.
Daniel Balint- Kurti, head of investigations at Global Witness, said: ‘Sir Mick Davis should be setting an example, not fronting offshore companies. He should not be within a million miles of something this murky.’
BSGR’s administrators BDO said the proposed settlement with Guinea was a ‘ non-binding framework’. They added that they are ‘in the process of working with the commercial partner to flesh out the terms of the production and revenue- sharing agreement with them’.
Nysco, the owner of BSGR, said: ‘There is no scandal – a settlement has been reached with the Guinean government. Any suggestion that either Beny Steinmetz or BSGR are guilty of bribery and corruption is utterly denied, and has never been proven.’
The government of Guinea and the Conservative Party have been contacted for comment.