President Conte is reported to have awarded the rights to BSGR who promptly went ahead to spend $160 million to get the mine into production.
Because of the huge capital outlay, BSGR then went into a deal with the Brazilian miner Vale who acquired a 51% stake of the concession costing $2.5 billion, and paying upfront $500million, with the balance $2 billion to be paid after the project has attained certain agreed milestones.
In 2014 after a “special enquiry” The Guinean government under President Alpha Conde cancelled BSGR’s rights to exploit the Simandou iron ore mines.
In August that year Rio Tinto filed charges in a US court accusing BSGR and Vale of conspiring to steal its (Rio Tinto) mining rights to the Simandou deposits. The case was filed under the United States Racketeering Influenced and Corrupt Organizations Act 1971 (RICO).
Reportedly the case was dismissed on technical grounds bordering on the statute of limitations.
The Judge stated “The statute of limitations begins to run on the date the plaintiff [referring to Rio Tinto] learned of his or her injury, not on the date the plaintiff learned that his or her injury may have resulted from racketeering activity”.
Within the context of the case, the start of the statute began on December 9 2008 when Rio became aware that it had been stripped of its rights to Block 1 and 2, not on April 30 2010 when BSGR announced its joint-venture with Vale.
BSGR says “This pointless claim, doomed to fail from the moment it was launched, is the latest in a long line of Rio’s attempts to harass BSGR and deprive it of its legitimate interest in the Simandou project to the great detriment of Guinea and its people.”
Rio Tinto on the other hand have remarked “We are still evaluating the judgment and considering our options but this is not a decision on the merits of Rio Tinto’s claims. Judge Berman’s decision was focused on a narrow point of law and he did not rule on the evidence Rio Tinto has been gathering in the case. Rio Tinto is free to both appeal Judge Berman’s decision and pursue its claims in other forums, and is actively looking at all options”.
This court case arguably heralded the decline in Koidu Holdings with its multi-million dollar “state of the art” plant all but grounded.