April 2, 2023

Steinmetz, who was sentenced to five years in prison for corruption related to Guinea's mining rights deal, insists he is the "great injustice"
Steinmetz, who was sentenced to five years in prison for corruption linked to Guinea’s mining rights deal, insists he is the victim of a “gross injustice”

French-Israeli diamond magnate Beny Steinmetz will return to a Swiss court on Monday to appeal a corruption verdict related to mining rights in Guinea.

A Geneva court in January 2021 convicted the 66-year-old businessman of establishing a sophisticated financial network to pay bribes to secure a license for his company in an area estimated to contain the world’s largest untapped iron ore deposit.

He was sentenced to five years in prison and ordered to pay 50 million Swiss francs ($52 million) in restitution to the canton of Geneva.

Steinmetz maintained his innocence throughout the trial and immediately appealed the ruling, denouncing it as “a colossal injustice.”

Two of his alleged co-conspirators, who were sentenced to shorter sentences, are also appealing.

Steinmetz has made changes to his appellate law and communications teams, who are preparing to argue that the lower court did not fully hear his arguments and misunderstood the situation.

His spokesman, Marc Comina, said in a document detailing the diamond tycoon’s case that the first trial portrayed Steinmetz in a “completely unrealistic” way.

Far from being corrupt, Beny Steinmetz Group Resources (BSGR) has legally acquired the relevant mining rights and worked under difficult and complex circumstances to build a business that would benefit Guinea’s national interests, the document said.

Swiss prosecutors have painted a very different picture in their first trial, the culmination of a protracted international investigation that began in Switzerland in 2013.

They accused Steinmetz and two partners of bribing the wife of then Guinean President Lansana Conte and others to win mining rights in the southeastern region of Simandou.

Prosecutors said Steinmetz acquired the rights shortly before Conte’s death in 2008, after the company paid about $10 million in bribes over several years, some of it through Swiss bank accounts.

Conte’s military dictatorship ordered global mining giant Rio Tinto to relinquish two concessions to BSGR in 2008 for about $170 million.

Just 18 months later, BSGR sold its 51 percent stake in the concession to Brazilian mining giant Vale for $2.5 billion.

But in 2013, Guinea’s first democratically elected president, Alpha Conde, reviewed the license granted by Conte and later stripped the VBG consortium of BSGR and Vale.

To secure the original deal, prosecutors allege that Steinmetz and Guinean representatives entered into a “corruption agreement” with Conte and his fourth wife, Mamady Toure.

Toure admitted to receiving payment and is protected in the United States as a state witness.

She and some other key witnesses in the case did not appear at the first trial, and it is unclear whether they will appear on appeal.

Steinmetz, who lived in Geneva during the alleged bribery, continues to insist the bribery allegations are “completely false,” according to documents released by his team.

It maintains that Rio Tinto lost half of its concessions in Simandou for failing to develop half of the concessions in Simandou under Guinean mining law, and that BSGR later legally bid and won those rights.

The document said the decision “was not in any way illegal or arbitrary.”

It also argued that the lower court misunderstood the nature of the deal with Vale, while BSGR wanted a lasting partnership and business in Guinea.

“BSGR never intended to leave Guinea once the partnership was signed with Vale,” it said.

“If it had not been driven out of the country, BSGR would still be operating in Guinea today and would be a major player in the country’s economic rise.”

Steinmetz was given a guarantee of legal right of passage to participate in the first trial, but left Switzerland without serving his sentence.

After getting another free pass, he will return to a Geneva court on Monday to defend his case, with an appeal hearing until September 7. A verdict will be given at a later date.

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