U.S. Court Dismisses Rio Tinto Lawsuit Against Vale -- Update
November 20 2015 - 3:38PM
Dow Jones News
By Stephen Dockery
A U.S. District Court on Friday dismissed a lawsuit by Rio Tinto
PLC alleging that Vale SA conspired with an Israeli billionaire to
take Rio Tinto's mining concessions in West Africa, with the court
finding the events were outside the statute of limitations.
Rio's lawsuit pitted two of the world's largest mining companies
against each other in a fight over a vein of iron ore in the
Simandou range of Guinea, one of the richest veins ever discovered.
Rio Tinto, an Anglo-Australian company, alleged that Brazilian
mining company Vale worked with Israeli billionaire Benjamin
Steinmetz and his mining company, BSG Resources Ltd., starting in
December 2008 to illegally take Rio Tinto's mining rights in
Guinea.
Judge Richard Berman in the Southern District of New York
decided Rio Tinto's suit came too long after the alleged misconduct
occurred to seek damages. In his decision, he wrote that the "claim
is outside of the four-year civil RICO statute of limitations and
is, therefore, time-barred."
He also decided Rio Tinto had not alleged an lengthy enough
scheme to back up its claims of fraud and conspiracy under the
Racketeer Influenced and Corrupt Organizations Act.
Vale's lawyer, Jonathan Blackman of Cleary Gottlieb Steen &
Hamilton LLP, described the suit as "an effort by a competitor to
take advantage of the corruption scandal in Guinea." In a
statement, Vale said it was "pleased that the U.S. court saw that
Rio Tinto's allegations were baseless."
BSG Resources said the court found "Rio Tinto had failed even to
make coherent accusations of racketeering by BSGR and Mr. Steinmetz
in connection with the Simandou concession."
Rio Tinto wasn't immediately available for comment.
The case was one aspect of the contentious acquisitions of
iron-ore-mining concessions from the government of Guinea under the
last years of President Lansana Conté's rule.
Rio Tinto had held the whole block of iron-ore concessions and
was exploring them before half of those areas were redistributed to
BSG Resources in 2008. BSGR subsequently sold a 51% stake in its
Guinean assets to Vale for $2.5 billion.
An investigation carried out by the Guinean government found BSG
Resources obtained the rights through corruption, and stripped them
from the company while clearing Vale of wrongdoing. BSG Resources
denied there was any impropriety in its acquisition of the assets
and is trying to win compensation.
There is a continuing criminal corruption investigation into the
mining deal by the U.S., The Wall Street Journal reported
previously. People familiar with the matter said senior executives
of BSG Resources are among those being investigated. The company
has said previously there is no evidence linking its employees to
corruption in Guinea.
Write to Stephen Dockery at stephen.dockery@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 20, 2015 15:23 ET (20:23 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Vale (NYSE:VALE)
Historical Stock Chart
From Aug 2024 to Sep 2024
Vale (NYSE:VALE)
Historical Stock Chart
From Sep 2023 to Sep 2024