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.

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