Rio Tinto Sues Israeli Billionaire Beny Steinmetz Over Guinea Mining Rights

Rio Tinto has filed a complaint over iron ore mining rights(Reuters)

Anglo-Australian mining giant Rio Tinto has filed a lawsuit over its loss of valuable mining assets in Guinea.

The company filed a complaint against its competitor Vale, BSG Resources (BSGR) and the Israeli billionaire Beny Steinmitz, who they accuse of stealing one of the world's largest and most valuable untapped iron ore reserves, through a scheme that breached US Federal law.

Rio Tinto alleges that the defendants concocted a fraudulent scheme that led to "the theft of Rio Tinto's valuable mining rights ... through a scheme in violation of the Racketeer Influence and Corrupt Organizations Act."

The lawsuit, filed in a New York District Court, relates to the rights to the Simandou mining concession in Guinea, west Africa..

Rio Tinto lost the rights to the northern half of the development in 2008, when Guinea's former President Lansana Conte's government revoked its permit. It was then transferred to BSGR, the mining arm of Steinmetz's conglomerate.

Guinea says it now has "precise and coherent evidence" that BSGR used intermediaries to pay bribes to Mamadie Touré, Conté's wife, until his death in 2008.

Rio Tinto is seeking the New York courts "to award compensatory, consequential, exemplary and punitive damages ... in an amount to be determined at trial," according to a statement.

"Rio Tinto's injuries are clear and definite and include the loss of billions of dollars in assets, as well as the lost investment of its activities in Simandou," Rio Tinto said in the filing.

"This is a case about the theft of Rio Tinto's valuable mining rights by the defendants through a scheme in violation of the Racketeer Influence and Corrupt Organizations Act," it added.

Steinmetz and BSGR deny all allegations of wrongdoing and said they will seek international arbitration against the government of Guinea.

In a statement, BSGR said "Rio Tinto chose to do nothing with its mining rights so the mining rights were taken away. Baseless and bizarre lawsuits like this won't change that fact."