Mist shrouds the Simandou mountains in Beyla, Guinea, June 4, 2014. REUTERS/Saliou Samb/File Photo
Top Rio Tinto executives in 2011 approved a $10.5 million payment to a consultant to smooth relations with the president of Guinea as it struggled to secure land for a giant iron ore mine, emails made public on Thursday showed.
The emails, seen by Reuters, show correspondence between three of the miner’s most senior officials: former chief executive Tom Albanese, his successor and then iron ore division head Sam Walsh, and energy and minerals head Alan Davies.
In one email to Walsh, Davies, who was in charge of the giant Simandou project in 2011, requested final approval to make the payment to Francois de Combret, a former Lazard investment banker with a long history operating in Guinea.
That message came just days after Rio said it would pay the government of Guinea $700 million to resolve an impasse over part of the project, known as blocks 3 and 4.
Rio said on Wednesday it had launched an investigation, after becoming aware of the emails on Aug. 29 and had notified relevant U.S. and UK authorities. It suspended Davies. Another senior executive quit.
It was not clear exactly what services de Combret was being compensated for, although one email referenced “his very unique and unreplaceable services and closeness to the (Guinean) President”.
Davies did not answer his mobile phone when contacted by Reuters. Albanese did not immediately respond to messages. Walsh could not be immediately contacted for comment. Rio declined further comment.
In one exchange, Davies said he had spoken to de Combret.
“We have reached a final point, where Francois has requested a fee for services on securing 3 and 4 of US$10.5m. This is clearly stated as his bottom line, and a reduction from his request of US$15m,” Davies wrote.
“Sam, I accept that this is a lot of money, but I also put forward that the result we achieved was significantly improved by Francois’ contribution,” he wrote.
“He vouched for our integrity when it was needed and helped bring us together when things were looking extremely difficult.”
In the correspondence, Walsh wrote there was “no question” de Combret “delivered sizeable value.”
The emails have come to light a month after Rio agreed to sell its stake in the Simandou project to Chinese state-owned Chinalco, touted as one of the world’s biggest deposits.
Albanese was ousted by Rio’s board in 2013 following disastrous investments in aluminum and coal, and was replaced by Walsh, who retired in July.
De Combret was a classmate of Guinea’s President Alpha Conde, who worked at Lazard bank until 2005, according to World Bank’s International Centre for Settlement of Investment Disputes web site.
De Combret could not be reached for comment and Lazard said it could not comment.
Source: Reuters
