When Frederick Forsyth wrote The Dogs of War in the early 1970s, African democracy had already become a joke: one man, one vote, one time.
The novel’s fictional setting of Zangara was based on Equatorial Guinea, with the addition of a huge platinum deposit in the so-called Crystal Mountain.
Now non-equatorial Guinea appears to have a huge iron deposit in its Simandou Mountains, and that has led to similar drama:
As with deepwater oil drilling or with missions to the moon, the export of iron ore requires so much investment and expertise that the business is limited to a few major players. In 1997, the exclusive rights to explore and develop Simandou were given to the Anglo-Australian mining giant Rio Tinto, which is one of the world’s biggest iron-ore producers. In early 2008, Tom Albanese, the company’s chief executive, boasted to shareholders that Simandou was, “without doubt, the top undeveloped tier-one iron-ore asset in the world.” But shortly afterward the government of Guinea declared that Rio Tinto was developing the mine too slowly, citing progress benchmarks that had been missed, and implying that the company was simply hoarding the Simandou deposit — keeping it from competitors while focussing on mines elsewhere.
In July, 2008, Rio Tinto was stripped of its license. Guinean officials then granted exploration permits for half of the deposit to a much smaller company: Beny Steinmetz Group Resources, or B.S.G.R. Beny Steinmetz is, by some estimates, the richest man in Israel; according to Bloomberg, his personal fortune amounts to some nine billion dollars. Steinmetz, who made his name in the diamond trade, hardly ever speaks to the press, and the corporate structures of his various enterprises are so convoluted that it is difficult to assess the extent of his holdings. The Simandou contract was a surprising addition to Steinmetz’s portfolio, because B.S.G.R. had no experience exporting iron ore. A mining executive in Guinea told me, “Diamonds you can carry away from the mine in your pocket. With iron ore, you need infrastructure that can last decades.”
Rio Tinto angrily protested the decision. “We are surprised that a company that has never built an iron-ore-mining operation would have been awarded an area of our concession,” a spokesman said at the time. Company officials complained to the U.S. Embassy in Conakry; one of them suggested that Steinmetz had no intention of developing the mine himself, and planned instead to flip it — “to obtain the concession and then sell it for a big profit.” Rio Tinto viewed Steinmetz, who was rumored to have extensive contacts in Israeli intelligence, as a suspicious interloper. According to a diplomatic cable released by WikiLeaks, the general manager of Rio Tinto told the U.S. Embassy that he did not feel comfortable discussing the Simandou matter on an “unsecured” cell phone. Alan Davies, a senior executive at Rio Tinto, told me that the company had invested hundreds of millions of dollars at the site, and had been moving as expeditiously as possible on a project that would have required decades to complete. “This was quite a shocking event for the company,” he said.
In April, 2009, the Ministry of Mines in Conakry ratified the agreement with Steinmetz. A year later, he made a deal with the Brazilian mining company Vale — one of Rio Tinto’s chief competitors. Vale agreed to pay two and a half billion dollars in exchange for a fifty-one-per-cent stake in B.S.G.R.’s Simandou operations. This was an extraordinary windfall: B.S.G.R. had paid nothing up front, as is customary with exploration licenses, and at that point had invested only a hundred and sixty million dollars. In less than five years, B.S.G.R.’s investment in Simandou had become a five-billion-dollar asset. At that time, the annual budget of the government of Guinea amounted to just $1.2 billion. Mo Ibrahim, the Sudanese telecom billionaire, captured the reaction of many observers when he asked, at a forum in Dakar, “Are the Guineans who did that deal idiots, or criminals, or both?”
Steinmetz was proud of the transaction. “People don’t like success,” he told the Financial Times, in a rare interview, in 2012. “It’s disturbing to people that the small David can disturb the big Goliath.” He said that it was B.S.G.R.’s strategy to pursue “opportunities in an aggressive way,” adding, “You have to get your hands dirty.”
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Earlier this year, lawyers for Steinmetz sent a letter to Malloch-Brown, demanding that he acknowledge his “personal vendetta” against Steinmetz, sign a formal apology that they had scripted, and “clear” B.S.G.R. of any wrongdoing in Africa. When Malloch-Brown refused, B.S.G.R. sued him, along with F.T.I. The lawsuit claimed that Soros nurtured a “personal obsession” with Steinmetz; it also alleged that Soros had perpetuated a shocking rumor — that Steinmetz tried to have President Condé killed, by backing the mortar attack on his residence in 2011. (B.S.G.R. maintains that this rumor is entirely unfounded; the lawsuit was recently settled out of court, with no admission of wrongdoing by Malloch-Brown or F.T.I.)
The mortar attack is especially reminiscent of Forsyth’s novel.