BSG Resources Seeks Judicial Review of UK's Role in Guinea Mine Probe

By Alex MacDonald

LONDON--BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz's family conglomerate, is seeking a judicial review of the U.K. government's decision to help Guinea with an investigation that stripped the mining company of a coveted multi-billion dollar iron ore project this year.

Guernsey-based BSGR on Friday said it filed its request with the U.K. High Court in London last month, alleging that the U.K.'s Serious Fraud Office and Home Secretary Theresa May--the minister in charge of the Home Office--agreed to help Guinea without investigating its political motivations.

It claims that the two U.K. bodies offered unlawful assistance to the Guinean government, which revoked BSGR's rights to a 142-square-mile, high quality, iron-ore concession in the country's Simandou mountains in April. BSGR claims the Guinean government's action was governed by its desire to reward the financial backers of President Alpha Conde's 2010 election campaign.

Guinea says BSG Resources obtained the mining rights by improper means. Mr. Steinmetz has previously called the Guinean probe's findings a smear campaign against him, while BSGR is seeking compensation for the loss of its rights through international arbitration.

Spokesmen for both the SFO and Home Office said their respective departments could neither confirm nor deny their interest in the case, while a Guinean government spokesman said, "Guinea has every confidence in the courts to deal with these matters." The U.K.'s Home Office wasn't immediately available to comment.

The U.S., France, and Switzerland are also carrying out their own criminal probes into BSGR's activities at the request of the Guinean government.

BSGR's former Simandou partner, Vale SA (VALE), is also considering whether to settle a multi-billion dollar lawsuit concerning its investment in the project. Rio Tinto PLC (RIO), which previously owned the entire Simandou concession, is suing Brazil's Vale SA for helping Mr. Steinmetz "misappropriate" Rio's half of the Simandou concession. Vale said last week it would consider settling the matter out-of-court without admitting wrong-doing.

Write to Alex MacDonald at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires