Rio adviser had links to Guinea president

November 19, 2016

by: Neil Hume and Tom Burgis

The former Lazard banker who helped Rio Tinto secure rights to a giant iron ore deposit in Guinea was also working as an informal adviser to the country’s president and had access to “highly confidential” information.

The disclosure raises the question of whether the Anglo-American mining company broke anti-corruption laws when it paid François Polge de Combret $10.5m in 2011 for assisting in negotiations on the Simandou project.

Lawyers and academics said the payment could lead to investigations by US and UK regulators. “I think it is likely the Department of Justice and the Securities and Exchange Commission would consider a payment to such an individual problematic,” said Mike Koehler of Southern Illinois University, an expert on US anti-corruption law.

The UK’s Serious Fraud Office is already evaluating whether to launch an investigation into the payment, according to one person close to situation.

Rio has alerted authorities including the SFO and the DoJ about the payment and last week fired Alan Davies, the head of its energy and minerals business, who was previously in charge of the project, and Debra Valentine, its legal chief.

The company has not said why it reported the fee but emails from 2011 posted online in August showed senior Rio executives discussing the payment to Mr de Combret and his “closeness” to Guinea’s president Alpha Condé.

Guinea has called on Rio to provide a full account of any malpractice identified in the company’s dealings with the government.

“Statements to the media from Rio Tinto have suggested that Mr de Combret was in the pay of Rio Tinto during high-level negotiations between the company and the Guinean government,” said Abdoulaye Magassouba, minister of mines and geology, in a statement.

“Mr de Combret was at the time acting in a capacity that would have given him access to highly confidential information.”

A spokesman for the government of Guinea confirmed that Mr de Combret acted as an informal adviser to Mr Condé between 2011 and 2014. Another person familiar with the situation said that while Mr de Combret was not a government official he was as “uncompensated adviser” to the president.

Rio has been involved in several fierce legals battles since it began exploring Simandou, one of the world’s biggest untapped deposits of iron ore, 20 years ago. It lost half the rights to the project in 2008 and only managed to hold on to the rest in 2011 through a $700m payment to the then new government of Mr Condé — a deal which, the leaked emails indicate, Mr de Combret helped to facilitate. The ex-Lazard banker declined to comment.

In one of the emails, Mr Davies tells former Rio chief executive Sam Walsh that Mr de Combret had “very unique and unreplaceable services and closeness to the president” of Guinea, and had helped the company to secure its tenure over mining leases for Simandou.

Guinea’s government said in a statement this month that it “had no knowledge, at the time in 2011, that Mr de Combret acted in any capacity on behalf of … Rio Tinto”.