Reuters carried a story quoting an analyst who says Vale is prioritizing Brazilian investments over Guinean projects as it gains an environmental license to develop Serra Sul. The real reason its getting cold feed on the giant Simandou mines may be rather different.
Vale's African partner, BSG Resources, has gone ballistic and is threatening to sue investment bank BTG Pactual and its partner B&A Mineração over financing talks apparently carried out with the Guinean government. B&A is the investment vehicle of Roger Agnelli , ex-CEO of Vale.
The details are murky but what is clear is that Guernsey-based BSGR thinks that the BTG-B&A talks with Guinean president Alpha Conde are related to logistics for its blocks in Simandou. BSGR and Vale hold the rights to develop two blocks at the mine and any third party financing could breach contract. In 2010, Vale bought 51% of the assets of BSG resources in BSG Resources (Guinea), creating VBG.
Lamine Fofona, minister of mines in Guinea, has angrily rejected BSG allegations, calling them “insulting, fantastic and contradictory. Talks with BTG and B&A are perfectly legal, open and transparent and are not linked to the exploration of Simandou blocks 1 and 2, he says.
Could all this malarkey explain Vale's cold feet?