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Vale's lawyers demand US$500M deposit by BSG to continue appeal over US$2B award

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Vale's lawyers demand US$500M deposit by BSG to continue appeal over US$2B award

Lawyers acting for Vale SA demanded BSG Resources Ltd. to make a security deposit of US$500 million before continuing its appeal on a US$2 billion arbitration award owed to Vale for their dispute over the Simandou iron ore project in Guinea, Financial Times reported Sept. 6.

The move comes following allegations by Swiss prosecutors that Beny Steinmetz facilitated bribes to the wife of the country's former president Lansana Conté to secure the mining rights over the deposits.

Vale filed the case with the London Court of International Arbitration — seeking to recover the upfront payment for a 51% stake in Simandou, as well as its investment in the operation — after an investigation uncovered that the rights to Simandou were acquired through corruption.

BSG, which claimed it was unfairly treated by the London arbitration court, filed for bankruptcy protection in the U.S. in June. It previously entered into voluntary administration in March 2018 in the U.K., part of pre-emptive measures to protect itself against the arbitration award.

In a court filing cited in the London-based newspaper's report, Vale claimed BSG was enacting all possible measures in order to "frustrate and delay Vale's ability to recover the compensation."

Earlier this year, Steinmetz's BSG decided to abandon Simandou as part of a settlement with the Guinea government. In July, the West African nation launched an international tender for blocks one and two of the deposit previously held by BSG.