LONDON Frederic Cilins, an associate of Israeli diamond billionaire Beny Steinmetz, was arrested April 14 in the United States and accused of attempting to obstruct an ongoing investigation into how BSG Resources Ltd. (BSGR), the mining arm of Steinmetzs BSG Investments Ltd., won a concession to one of the worlds largest untapped iron ore reserves, according to documents seen by AMM sister publication Steel First.
"The arrest and investigation supports the government of Guineas policy of transparency. We welcome support from the USA in our efforts to strengthen the rule of law in Guinea," Christian Sow, Guineas minister for justice, said.
A criminal complaint was filed April 15 in U.S. District Court in New York, charging Cilins with obstructing a criminal investigation; tampering with a witness, victim or informant; and destroying, altering or falsifying records in a federal investigation, the U.S. Justice Department said on its website. The obstruction charge carries a maximum penalty of five years in prison, while the latter two each carry a maximum penalty of 20 years in prison.
Cilins arrest is part of a wider investigation, led by the Justice Department, into BSGRs purchase of Blocks 1 and 2 of the Simandou iron ore deposit in Guinea. The company was handed the concession to those blocks after they were stripped from Rio Tinto Plc by former dictator Lansana Conte in 2008.
A version of this article was first published by AMM sister publication Steel First.