Wednesday, October 28, 2020

Mining Corp Rio Tinto seeks settlement over Simandou iron mine deal

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Rio Tinto is in discussions with the UK’s Serious Fraud Office (SFO) about a possible deal under which the miner would avoid prosecution on bribery allegations over dealings for the giant Simandou iron mine in Guinea, the Financial Times reported.

At two billion tonnes of iron ore with some of the highest grades in the industry, Simandou is one of the world’s biggest and richest reserves of the steelmaking material, but it has a controversial past.

The Office is reportedly seeking a deferred prosecution agreement (DPA) over a payment Rio Tinto made that came under scrutiny in 2016. The world’s number 2 miner fired two senior managers over a questionable $10.5 million payment made to a consultant who helped the company secure the two blocks and alerted authorities, including the US Department of Justice and the UK’s Serious Fraud Office.

Rio Tinto had previously held rights to develop all four blocks of Simandou before being stripped of the rights to blocks 1 and 2 in 2008.

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Emails from 2011 that were posted online showed senior Rio executives discussing the payment to Combret.

The messages indicate that Combret helped the company to secure its claim to half of Simandou with a $700 million payment to the then new government of Alpha Condé.

For negotiations to begin under a DPA, a company must agree to terms that include paying a fine and co-operating with future prosecutions.

According to information published by the SFO after a freedom of information request, 66 individuals were interviewed under caution in relation to DPAs between 2014 and April 2020 and 11 charged, but none have been convicted, the Financial Times reported.

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