Powerscourt called in to help mining firm BSGR after FTI Consulting resigns account

A global mining venture at the heart of a $10bn (£6.21bn) international dispute has drafted in agency help after former incumbent FTI Consulting resigned the account.

Mining: Exploration licences for iron ore can be worth billions of dollars
Mining: Exploration licences for iron ore can be worth billions of dollars

Onyx Financial Advisors has called in Powerscourt to fight the corner of Israeli billionaire Beny Steinmetz's mining group over a clash with the newly elected government of Guinea.

The dispute centres on key mining exploration licences held in the West African country by Beny Steinmetz Group Resources (BSGR) via a joint venture with Brazilian mining firm Vale.

BSGR acquired the iron ore mining rights in 2006 and sold on just over half its share to Vale for $2.5bn (£1.55bn) in 2010 – the entire venture is estimated to be worth between $8-10bn.

However, the recently installed Government of Guinea is reviewing pre-existing mining agreements and has pledged to take back the licences after making allegations of corruption against the BSGR.

Last month BSGR vigorously denied the accusations, stating that 'the allegations are baseless and merely constitute a crude smear campaign' and that the firm 'contests the legitimacy of the whole process and will use all available means to protect the rights it legally acquired in Guinea'.

The statement was issued via FTI Consulting, which was contracted by Onyx, a company that provides management and administration services to BSGR.

However, FTI dramatically resigned the account in Mid November over conflict issues.

PRWeek understands that this conflict stemmed from FTI Consulting’s chairman of global affairs Lord Malloch-Brown and his relationship with international financier George Soros.

Malloch-Brown, former UN Deputy Secretary-General and foreign office minister, is heavily involved with a number of Soros-backed organisations, including the Open Society Foundations. Soros is also a supporter and financial backer of Global Witness, an NGO that has called on BSGR to answer questions about its operations in Guinea.

Soros is understood to have become personaly involved in the wider campaign against BSGR’s involvement in Guinea and it is thought that FTI’s conflict related to Malloch-Brown’s close working relationship with Soros.

PRWeek has learned that Powerscourt was called in without a pitch in the days following FTI's resignation on the recommendation of one of BSGR's legal advisers.

It is thought Powerscourt's brief encompasses all four Steinmetz-owned businesses, including real estate and diamonds, and will focus on BSGR's positioning in the international media as well as proactively fighting the corruption allegations.

The account is thought to be worth a significant six-figure sum.

 

* The article has been ammended to clarify the relationship between George Soros and Global Witness.

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Latest Articles

Three more agencies sign up to PR Internships For All campaign

Three more agencies sign up to PR Internships For All campaign

Brunswick, Cohn & Wolfe and MSLGroup have joined the PRWeek/PRCA initiative to boost diversity in the PR industry, which has also attracted support from Leeds Metropolitan University's Business School.

Seeing red: giving PR teams a real business objective

Seeing red: giving PR teams a real business objective

Speed Communications director John Brown talks client behaviours he can't stand.

Growing number of clients plan PR budget increases

Growing number of clients plan PR budget increases

The number of marketers planning to increase their PR budgets during 2014 has climbed, according to the latest quarterly Bellwether survey by the Institute of Practitioners in Advertising.

Max Clifford trial jury to continue deliberations tomorrow

Max Clifford trial jury to continue deliberations tomorrow

The jury in the trial of celebrity publicist Max Clifford has been sent home after a second day of deliberations about its verdicts on 11 charges of indecent assault.