SFO investigates Rio Tinto’s Guinea project

THE Serious Fraud Office has opened a corruption investigation into Rio Tinto’s activities in Guinea nine months after the mining giant reported itself to authorities in the UK and the US.

The probe will focus on alleged multimillion pound bribery payments made in 2011 to a contractor in the African nation linked to the sprawling Simandou iron ore project.

The fraud watchdog said that it would look into “suspected corruption” in the African nation by the company itself, its staff and other associates.

In November 2016, Rio terminated the contracts of Alan Davies, who ran its energy and mineral unit, and Debra Valentine, its legal and regulatory affairs boss. Mr Davies said at the time he would take the “strongest possible legal action” to defend himself.

In the same month, the FTSE 100 mining giant contacted the SFO to inform it of the alleged payments, as part of its investigation of $10.5m (£8.1m) of handouts allegedly paid to a consultant for assisting negotiations around Simandou with the president of Guinea.

The Simandou project has caused nothing but pain for Rio, which bought the concession in 1997, but lost half the rights to it in 2008, when the Guinean government transferred them to Beny Steinmetz’s BSG Resources (BSGR).

BSGR later sold its stake to Brazil’s Vale for $500m. Rio sued BSGR and Vale in 2014 for conspiring to misappropriate its half of the deposit, but had its case thrown out on a technicality. Rio agreed to sell its stake in the project to Chinalco for $1.3bn in last October.

Two people were convicted on charges relating to corruption in Simandou – a former BSGR associate served two years in a US prison for obstructing an FBI investigation, while Guinea’s former minister of mines, who backed BSGR’S deal with Vale, was found guilty of laundering $8.5m in bribes.

Prosecutors in the US, Switzerland and Israel are also looking at the case.

A Rio spokesman said the firm would fully co-operate with the SFO.