Published On: Fri, Nov 20th, 2015

Steinmetz, BSG Resources Win Dismissal of Billion Dollar Rio Tinto Lawsuit

Judge finds that the suit came too far after the alleged misconduct occurred to seek damages.

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(CN) – A federal judge has thrown out Rio Tinto’s lawsuit claiming Brazilian mining giant Vale S.A. and an Israeli diamond magnate conspired to steal an iron ore reserve in southeast Guinea potentially worth billions.

     In a complaint filed in Manhattan Federal Court in May 2014, Rio Tinto, a British-Australian mining corporation based in London, claimed it spent 11 years and hundreds of millions of dollars developing its mining concession in the Simandou region of Guinea.

     But when it came time to grant a license to mine of what may be the most valuable untapped reserve of iron ore in the world, the Guinean government grated it not to Rio Tinto, but to defendant Beny Steinmetz’s BSG Resources, which then sold 51 percent of the mine to Vale for $2.5 billion, the lawsuit said.
On February 6, 2015, Vale, Beny Steinmetz, former Guinean Mining Minister Mahmoud Thiam and the other defendants named in the complaint moved for its dismissal on the grounds that the RICO claims on which it is based are time barred and that Rio Tinto failed to plead a “pattern of racketeering activity.”
Specifically, the defendants argued that the RICO injury allegedly suffered by Rio Tinto — the loss of the mining rights to Simandou Blocks 1 and 2 — occurred on Dec. 9 2008, when the decision of the Guinean government was announced, and that the statute of limitations for the alleged activities ran out in December 2012 — 16 months before the original complaint was filed.

     The defendants also argued that Rio Tino could not rely upon tolling the statute of limitations because, among other things, “a plaintiff who is not reasonably diligent may not assert fraudulent concealment.”
Rio Tinto filed its opposition to the motion for dismissal on March 6, 2015, claiming the defendants had the timeline wrong, and that the injuries it suffered occurred in 2010, when Vale publicly announced its joint venture with Steinmetz’s firm.

     It then claimed to have suffered an additional injury, in April 2010, “when Defendants’ extensive campaign of bribery and threats to Rio Tinto’s remaining mining rights to Simandou Blocks 3 and 4 left Rio Tinto with no alternative but to relinquish its claims to Blocks 1 and 2 as part of a settlement with the Guinean Government.”

 On review, U.S. District Judge Richard Berman said Rio Tinto appeared to assert a different dates of injury at different points in the litigation, ranging from December 9, 2008 to April 30, 2010.

 

Read the full story at Court House News, by DAN MCCUE 

 

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