GENEVA — Guinean President Alpha Conde has defended a decision to void hundreds of mining permits, including to the world’s biggest untapped iron-ore deposit, which was nixed after a corruption probe of an Israeli magnate’s firm.

“We decided to review all permits. We maintain those which are regular. Those which don’t meet requirements get a deadline to fall into line and those which are way off get withdrawn,” Conde said this week in Geneva, a global commodities trading hub.

Iron ore is the raw material of a global steel industry driven by booming demand from emerging powers such as China, so mining rights are hot property on international markets.

After his election in 2010, following years as an opposition leader, prisoner and exile, Conde launched a radical review of permits allotted under military dictator Lansana Conte.

The west African nation — already the world’s largest producer of bauxite, used to make aluminium — also has huge untapped deposits of diamonds, gold and uranium.

The highest-profile victim of a permit withdrawal is the VBG consortium formed in 2010 by Brazilian mining giant Vale and BSG Resources (BSGR), the mining arm of Israeli diamond king Beny Steinmetz.

This April, VBG was stripped of its concession in Guinea’s Simandou mountains, a southeastern region estimated to contain high-grade iron ore deposits of 2.25 billion tonnes.

While the root of that decision was corruption claims against BSGR — which the group denies vociferously and which Guinea underlines did not involve Vale — Conde stressed it was part of a wider clampdown.

“We’ve already taken back 800 permits, so this isn’t case-specific,” he told a small group of Swiss and international reporters.

“We’ve withdrawn permits in the sectors of iron, bauxite, gold and diamonds,” he added.

Deathbed deal

Guinea is still struggling to deal with the after-effects of decades of military dictatorships and misrule after its first democratic elections in 2010.

Conde said the goal was to better harness the resources of his poor west African nation of 10 million people.

“Our mineral wealth hasn’t benefited us at all, it’s been more of a curse. Now we need our wealth to become a blessing. That means we need win-win cooperation with mining groups,” he said.

“The big scandal for Guinea is people who take permits and make money on the markets thanks to those permits,” he said.

British-Australian giant Rio Tinto originally held all four Simandou concessions, but in 2008 was ordered by the Conte regime to relinquish two, which were then awarded to BSGR.

BSGR argued that Conte acted because Rio Tinto, which was in the middle of a global shake-up, had been sluggish in developing Simandou.

But the deal — signed on the deathbed of the strongman, who had led Guinea for 24 years — raised eyebrows worldwide.

Critics said the sale vastly undervalued the deposit, given that BSGR invested $170 million but sold half its rights to Vale for 14 times more just two years later.

That, and corruption allegations, spurred Conde’s decision to launch his mining permit review two years ago.

In April his government probe committee, using evidence from the US’s FBI, ruled that BSGR used intermediaries to pay bribes of at least $3 million to Conte’s wife Mamadie Toure.

BSGR has vigorously rejected claims of wrongdoing, saying the allegations rely on “fabricated claims, compromised witnesses and illegitimate processes” and accusing Conde of a “carefully orchestrated plan” to reward political allies with mining favors.

Vale welcome to bid

Conde brushed off those allegations.

“After a long investigation in the US, Switzerland and so on, the committee proposed to withdraw the permits and that’s what we’ve done,” he said.

“We’ve always said that all the investigations showed that Vale was not only not involved in corruption, but also was unaware of how the rights were obtained (by BSGR),” he noted.

“We’re going to launch a transparent, open bidding process for anyone who wants to take part. We hope strongly that Vale will take part. We don’t have any preferences, but nor are we against anyone,” he insisted.

Vale, which says it formed VGB on the basis that the permits were obtained “lawfully and without any improper promises or payments”, is understood to have paid $500 million up front as part of its $2.5 billion deal with BSGR.

Vale has launched a $1.1-billion arbitration suit against Guernsey-registered BSGR in London, the Swiss daily Le Temps reported on Wednesday.

Conde underlined that the saga had not affected moves to tap Rio Tinto’s concessions.

In 2010, Rio Tinto formed a consortium with Chinese state-run aluminium group Chalco, one of its major shareholders, to work on its remaining concessions.

Rio Tinto is involved in plans to build a 650-kilometer (400-mile) railway as well as a deep-water port to export the ore, mainly to China’s steel industry.

“With Rio Tinto, we’re in the process of finalizing the investment framework and we’ve agreed that mining should begin by 2018,” said Conde, adding that the railway is expected to spur broader economic development.