A legal fight between billionaire Beny Steinmetz and miner Vale over a failed iron ore joint venture in Guinea has come to an abrupt end in a London court.
The Brazilian company abandoned its pursuit of a $1.2bn personal claim on Monday and a worldwide freezing order against Steinmetz was discharged after its lawyers accepted the litigation had been brought too late under UK law, according to Law360, a legal news site whose reporter was present at the hearing.
However, Steinmetz said in a statement to the Financial Times that “the real reason behind Vale’s abrupt decision to discontinue its claim in the High Court in London goes well beyond limitations. We have a lot to say and will wait until we have received a final judgment on Tuesday 15th February”.
“Vale’s initiative to file a notice to discontinue this specific fraud process, against individuals and two entities linked to BSGR, is based eminently on procedural grounds,” the company said in a statement.
Dropping the claim is the latest twist in a bitter dispute over the rights to Simandou, a huge untapped deposit of iron ore in Guinea that is one of the richest prizes in mining.
It also marks the latest legal drama involving Steinmetz, a scion of one of Israel’s great diamond trading families. Last year, he was sentenced by a Swiss court to five years in jail for bribing a wife of Guinea’s late dictator Lansana Conté to win the licence to Simandou.
The 65-year-old mining magnate has launched an appeal against that ruling, which is due to be heard in September
The dispute between Vale and Steinmetz dates back to 2010, when the miner agreed to buy a 51 per cent stake in Steinmetz’s family mining group BSG Resources, including two blocks of Simandou, for $2.5bn — $500mn upfront with the rest to follow if certain targets were met.
But their joint venture to develop the assets was later stripped of its licence after the Guinean government concluded in 2014 that the rights to Simandou and another mining concession had been won through bribery.
That was the cue for Vale to launch legal action against BSGR, claiming it had been fraudulently lured into investing in the project. The Brazilian group was awarded $1.2bn ($1.85bn including costs and interest) by the London Court of International Arbitration in 2019.
After BSGR was placed into administration Vale decided to focus on Steinmetz and some of his key lieutenants to recoup the award.
The LCIA ruling remains unaffected by Monday’s decision to end litigation in London.
“Vale reinforces that it will continue to pursue through the other applicable legal procedures the recovery of the credit . . . owed by BSGR,” the company said in its statement. “Other existing procedures for this purpose are still in progress.”
Steinmetz has always insisted he can show Vale already believed — albeit incorrectly, on his side’s case — that BSGR had procured the rights through corruption and bribery before it decided to sign the deal.
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During the trial, which started in late January had been expected to last 11 weeks, lawyers for Steinmetz argued that the LCIA claim should not be enforced because Vale was aware of the allegations that rights to Simandou had been secured illegally, presenting as evidence a number of internal company presentations.
The lawyers accused Vale of being “prepared to take the risk” of developing blocks 1 and 2 of Simandou because they did not want it falling into the hands of companies from China, Vale’s biggest market.
Vale’s lawyers denied those allegations and said it did not know anything about such matters until considerably later.
Simandou remains undeveloped. The blocks at the heart of the legal dispute are now owned by the China-backed SMB Winning consortium.