A U.S. District Court rejected Brazilian mining company Vale
SA's bid to dismiss a lawsuit alleging it conspired with Israeli
billionaire Benjamin Steinmetz to take a West African mine away
from rival Rio Tinto PLC.
Rio Tinto's civil suit alleges that Vale, Mr. Steinmetz and his
company BSG Resources Ltd. as well as related entities conspired to
illegally obtain the Anglo-Australian company's mining rights in
Guinea.
U.S. Southern District of New York Judge Richard M. Berman also
dismissed rejected Vale's argument that the suit should be brought
in an English court.
Judge Berman said Rio Tinto's choice of a U.S. court for the
legal proceeding is justified based on the plaintiff's likelihood
of obtaining jurisdiction over all of the defendants, while England
isn't an adequate alternative forum.
Vale and Rio Tinto weren't immediately available for comment. In
April, Vale said it condemned the use of "corrupt practices" and
noted that a Guinean government probe found no involvement in
"fraudulent conduct" on its part.
"We are confident we will succeed in dismissing this meritless
claim on other grounds in the new year," a BSG Resources
spokesperson said Wednesday.
The civil lawsuit, which was filed in April, alleges that Vale
and its former partner Mr. Steinmetz worked together to take Rio
Tinto's rights to the Simandou iron-ore deposit through corruption.
In it, plaintiff Rio Tinto says BSG Resources bribed officials in
the Guinean government to revoke half of its Simandou concession
and then partnered with Vale, which "knew or should have known"
about the payments. Mr. Steinmetz and BSG Resources are also named
as defendants in the suit.
A week after the lawsuit was filed, a Guinean government
investigation concluded that Mr. Steinmetz's BSG Resources had
obtained rights to Simandou by improper means. As a consequence of
the investigation, Guinea revoked the concession from BSG Resources
and Vale.
Rio Tinto says it lost billions of dollars in assets and
investments made before its Simandou rights were revoked and claims
it is entitled to treble damages.
Paul Kiernan and Ira Iosebashvili contributed to this
article
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