The corrupters seek legal protection

Lawyers for a mining conglomerate run by one of the world's wealthiest men have launched legal action against the London-based campaign group Global Witness claiming damages for breaches of data protection rights.

The action takes a highly unusual legal approach, alleging that Global Witness has refused to comply with a decision of the UK information commissioner. The claim has been lodged on behalf of BSG Resources (BSGR), an international mining group run by the Israeli businessman Beny Steinmetz. It complains that BSGR has been the subject of "a sustained, negative publicity campaign by Global Witness." Steinmetz's wealth is estimated to be worth more than $4bn (£2.6bn). The claim has been served in his name and those of three others associated with BSGR, which is based in St Peter Port, Guernsey. The claimants submitted subject access requests to Global Witness under the Data Protection Act during 2012 and 2013, seeking details of personal data about Steinmetz and his colleagues held by Global Witness.

Dag Cramer, CEO of Onyx Financial Advisers, an adviser to BSGR and one of the others who have brought the action, said:
"Global Witness's refusal to tell us what personal data it has on us is a breach of the law and is deeply discomfiting to me and my fellow claimants.”

Global Witness, which was founded in 1993, has dismissed the legal action as an attempt to stifle journalism and investigations carried out in the public interest.

Global Witness, which campaigns against abuses in the exploitation of natural resources around the world, said in response to the claim: "Global Witness intends to robustly defend its position and regards the claim as an attempt to stifle journalism in the public interest. Global Witness has been investigating and reporting for over a year on how BSGR obtained rights to one of the world's largest iron ore deposits, the Simandou iron ore mine in Guinea. We have highlighted serious corruption concerns surrounding the deal, explaining in detail the reasons for our findings and asking questions of the companies concerned at every stage. BSGR still has not explained important aspects of its Simandou deal, notably the ownership of secretive companies associated with it. Rather than seeking to bully those raising legitimate concerns, BSGR should address these matters directly."

Socialist Banner reported the background to the mining corruption here .

Corrupt capitalism

Simandou, a mountain in the remote interior of the impoverished west African country of Guinea that is so laden with iron ore that its exploitation rights are valued at around $10bn.

Beny Steinmetz, an Israeli tycoon was estimated by Forbes magazine to have a net worth of $4bn, acquired the rights to extract half the ore at Simandou by pledging to invest just $165m to develop a mine at the mountain. Shortly afterwards, he sold half of his stake for £2.5bn. The rights to extract iron ore from Simandou had been held by Rio Tinto until late 2008 when Conté stripped the Anglo-Australian mining giant of half its stake. Apparently, the president signed the necessary paperwork while on his deathbed, one of the final acts of his dictatorial government. BSG Resources then acquired those rights, agreeing in return to invest $165m to develop what it described as "a world-class integrated mining project".

In April 2010, Steinmetz negotiated to sell half his company's stake – a quarter of the mountain's ore – to Vale of Brazil, the world's biggest iron ore miner. BSG Resources and Vale formed a joint venture company called VBG which would produce around 2m tons of iron ore a year.

When Vale agreed to pay $2.5bn, one veteran of African mining was quoted in the financial press as saying that Steinmetz had hit "the jackpot".

The US justice department decided to mount an investigation into circumstances. Unknown to either Steinmetz the FBI launched an investigation in January into whether payments allegedly made on behalf of Beny Steinmetz Group Resources, the Guernsey-registered mining arm of the tycoon's business empire that acquired the rights, were in breach of the US Foreign Corrupt Practices Act.

Frederic Cilins, an agent for Steinmetz's company, was arrested in Jacksonville, Florida, after federal agents had covertly recorded a series of meetings. The recording shows, it is alleged, that Cilins plotted the destruction of documents which it is claimed could have shown the Simandou exploitation rights were acquired after millions of dollars were paid in bribes to Guinea government officials. Cilins had in the past offered to pay $12m in bribes in order to influence the award of mining concessions. He had also paid out several million dollars, and had called the meetings in order to arrange for the destruction of documents concerning bribe payments and mining concessions.

Steinmetz has been embarking on litigation at the high court in London, accusing Mark Malloch-Brown, the former Foreign and Commonwealth Office minister and deputy secretary general of the United Nations, of being involved in a smear campaign against BSG Resources.

Guinea, a former French colony, has almost half of the world's bauxite reserves and significant reserves of iron ore, gold and diamond reserves, but the majority of its 11 million people live in poverty as a result of years of corruption.

African telecoms billionaire Mo Ibrahim, for example, asked publicly: "Are the Guineans who did that deal idiots, or criminals, or both?"