Vale SA (ADR) (NYSE:VALE) Most Likely To Be Indicted In Guinea Mining Rights Probe

In the continuous corruption investigation by the U.S. Government into Guinea mining rights of a company, it has been found out that the case could yield six accusations in home as well. The mining company under the U.S. lens is being operated by one of the wealthiest Israeli men. BSG Resources Ltd. executives could be involved in accusations as well. It is the same company that had, in the recent past (2008), struck a deal worth $2.5 billion for 51% stake of Guinean assets in Vale SA (ADR) (NYSE:VALE).

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BSG Resources Ltd. Role in the Case and Vale’s Appearance in Picture

The company is the mining division of another conglomerate, which is owned by Beny Steinmetz kin, the billionaire in Israel. According to the U.S. investigators, there have been allegations of bribery as well as hindrance of fairness against some of the senior executives of BSGR. Also, the investigation involves a deal that this company finalized in 2008 in order to achieve the mining rights in the mountain range of Simandou, Guinea. Simandou is among the largest hub of iron ore deposits. Later, the mining rights of BSGR in Simandou were stripped.

The U.S. is among various other probe-taking companies in the world that are trying to depict and find out how this West African country gave the Simandou rights to the company in the first place.

At some point of time, Rio Tinto plc (ADR) (NYSE:RIO) operated and run this whole block of deposits involving iron ore. Surprisingly, in the year 2008, the Government of Guinea awarded half these rights to BSG Resources Ltd. This happened after BSGR launched the exploration program worth $165 million. Later this firm finalized a deal with the U.S. based iron-ore specialist, Vale, in order to acquire 51% share of the Guinean assets.

BSG Resources spokesman demands explanation regarding lack of evidence

Meanwhile, instead of paying heed to the U.S. investigators, the firm’s spokesman said that it would strongly seek explanation from the Guinean government regarding lack of any authentic evidence to rationalize expropriation of its mining rights. He said that there was no evidence proving association of BSGR or its employees with Guinea corruption case.

David Barry

David Barry

Barry is a senior journalist at Us Markets Daily. He reports, shoots and edits many of his own stories by himself.