Rumble in the jungle over a vast iron ore deposit

Deep in the mountains of southeastern Guinea, the vast Simandou iron ore deposits are some of the best in the world.

Rio chair Jan Du Plessis and Chalco’s Xiong Weiping shake hands on a Simandou deal in 2010

Deep in the remote mountains of southeastern Guinea, the vast Simandou iron ore deposits are some of the best in the world.

Yet since 1997, when Rio Tinto first gained rights to explore the vast concession, not one of the more than two billion tonnes of iron ore Simandou is capable of producing has made its way to market.

Instead of billions in mining revenue, the rust-red earth has allegedly produced millions of dollars in bribes and shady pay-offs, the spoils of a war between global miners for control of the lucrative tenement.

It’s a story that involves secret side deals, wire-tapped meetings, a network of offshore companies and — in a walk-on role — financier George Soros.

Rio has always painted itself as having clean hands amid the dirty tricks of its rivals, Brazil’s Vale and Israeli businessman Beny Steinmetz’s BSG Resources, who it accused of teaming up to steal away half of Simandou in 2008 in a US lawsuit. After an FBI sting operation, BSG associate Frederic Cilins ended up in a US jail after being caught on tape offering to pay Mamadie Toure, the wife of former Guinean dictator Lansana Conte, $US5 million if she quickly destroyed evidence of bribery.

But Rio’s case against BSG and Vale collapsed in November, dismissed because it took too long to file the lawsuit. And now Rio is set to be investigated in three countries over a $US10.5m payment to what the company calls “a consultant providing advisory services on the Simandou project” in 2011, when it signed a $US700m deal with Guinea to keep control of the site.

According to documents Rio filed with the US Federal Court, trouble at Simandou came in 2005 when BSG sent Cilins to Guinea to lay the groundwork for a takeover.

Rio alleged Cilins spent six months staying at the Novotel in Conakry, which was popular with mining executives, picking up intel on the progress of the Simandou project by reading faxes going through the hotel business centre.

He then allegedly spent millions bribing Toure, president Conte’s fourth wife, and showered the regime with gifts including diamonds.

In late 2008, the Guinean government stripped Rio of half of Simandou, giving the concession to BSG. But its victory was at risk after President Alpha Conde won power in 2010.

In a lurid investor-state dispute filed with the World Bank, BSG, which has always denied wrongdoing, claims the election was rigged with the aid of $US50m from South Africa.

Conde enlisted Soros to help overhaul Guinea’s mining code, a step BSG paints as a conspiracy to tip it out of Simandou. The conspiracy allegedly included a “smear campaign” by Soros-backed anti-corruption NGO Global Witness and ended with BSG losing its licence in 2014.