Reuters reported that mining firm BSG Resources' threat to sue investment bank BTG Pactual over alleged misdealing with Guinea's government is insulting, fantastical and contradictory.

BSG is developing a portion of Guinea's Simandou iron ore project with partner Vale, though tensions have risen with the government over the financing of infrastructure and a revamp of the West African state's mining code.

A newspaper in Brazil reported that BSG was preparing to sue BTG Pactual, which it accuses of misusing its role as an adviser to Guinea's government to win licenses for a holding company at BSG's expense.

BSG is owned by Israeli billionaire Mr Beny Stenmetz. A BSG official in Conakry said he was not aware of the plans for a lawsuit, and other BSG officials were not immediately available to comment.

Mr Mohamed Lamine Fofana mines minister said that "The allegations are at once insulting, fantastical, and contradictory. The negotiations underway between the state and potential partners are happening in a perfectly legal, open and transparent manner."

He added that Guinea was consulting BTG Pactual and B&A, a holding company BTG Pactual formed with partner AGN Participacoes, for financing of a trans Guinean railway line that would link Simandou to port.

He said the talks did not pose a threat to the Simandou blocks operated by the BSG and Vale joint-venture.

Guinea is the world's top supplier of the aluminum ore bauxite and holds rich deposits of iron ore, but the country is struggling to maintain foreign investment amid deepening political turmoil, labor unrest, and a government review of mining contracts.

Source - Reuters

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