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CORRUPTION

French-Israeli billionaire faces prison over Guinea mining deals

French-Israeli billionaire Beny Steinmetz arrives at a courthouse in Geneva, Switzerland on 11 January, 2021.
French-Israeli billionaire Beny Steinmetz arrives at a courthouse in Geneva, Switzerland on 11 January, 2021. REUTERS - DENIS BALIBOUSE
4 min

The trial of a French-Israeli diamond magnate has begun in Geneva following an international investigation lasting more than six years. Beny Steinmetz is accused of paying lucrative bribes to the wife of the late Guinean president Lansana Conté in order to win mining rights.

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The trial centres on how Steinmetz, a 64-year-old billionaire businessman, managed to secure concession rights to a vast mountain of iron ore in Guinea's south-eastern Simandou region.

Swiss prosecutors accuse Steinmetz and two of his partners of paying an estimated $10 million in bribes to top Guinean officials between 2006 and 2012.

The trio is also accused of forgery for allegedly creating structures to hide the payment of bribes.

Steinmetz, who lived in Geneva until 2016, travelled to the city from Israel to take part in the two-week trial. He denies any wrongdoing.

"We will plead his innocence," his lawyer Marc Bonnant said.

Former first lady

Steinmetz acquired the rights to Guinea’s Simandou mining project, thought to be one of the world’s largest untapped iron ore resources, in 2008 under Conté’s military dictatorship.

His BSGR mining company beat out Anglo-Australian mining giant Rio Tinto.

Mamadie Touré, Conté’s fourth wife, was allegedly paid more than $8 million to get her husband to agree to the deal.

She is a key witness in the trial and is scheduled to testify on Wednesday, but there is doubt over whether she will attend.

According to Public Eye, a Swiss investigative non-profit, Touré lives in the United States where she has obtained protected status as a state witness.

Steinmetz’s lawyer maintains his client “never paid a cent" to Touré. He also claims Toure was never in fact Conté’s wife, but his mistress, meaning she might not be considered an "official" under Swiss law.

Simandou in south west Guinea is one of the richest untapped sources of iron ore in the world
Simandou in south west Guinea is one of the richest untapped sources of iron ore in the world 2016 Rio Tinto

Facing a decade in prison

In 2013, Alpha Condé, Guinea's first democratically elected president, launched a review of permits allotted under Conté. He later stripped the VBG consortium formed by BSGR and Brazilian miner Vale of its permit.

In February 2019, Steinmetz reached a deal with Guinean authorities to withdraw allegations of corruption against him, but Geneva has continued to press ahead with its case. Steinmetz faces a jail sentence of between two and 10 years if convicted.

The verdict is expected on 22 January.

Curse of natural resources

For Geraldine Viret, a spokesperson for Public Eye, the case is “a sad illustration of the problematic curse of natural resources", and shows how a country as rich in natural resources as Guinea can continue to wallow in poverty.

In effect, just 18 months after getting the Simandou mine concession in 2008 and investing $170 million, Steinmetz’s BSGR mining company sold 51 percent of its stake to Vale for $2.5 billion.

"The profit was colossal, about twice Guinea's state budget at the time," Viret said.

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