The Guinean Government has published a report recommending the withdrawal of BSGR Resources' mining permit for the Simandou iron ore deposit, and cancellation of the company's Zogota mining concession.
The report urged the government to exclude VBG, the company's joint venture (JV) with Vale, from any additional process towards re-allocating the licenses in the future.
Reuters quoted the report as saying: "There is a set of precise and coherent evidence establishing with sufficient certainty the existence of corrupt practices that tarnished the granting of mining rights and mining concession for Simandou and Zogota to BSGR."
"As such, the corrupt practices also tarnished and voided mining rights and concessions currently held by the VBG joint venture."
BSGR denied the allegations and said that the Guinean Government is relying on fabricated claims, compromised witnesses and illegitimate processes to justify a plan to reward political allies.
BSGR noted that it has sought to cooperate with the committee despite the fundamental unfairness, procedural irregularities and false claims inherent in its review process.
"The next step is international arbitration where the evidence can be aired in a proper forum and BSGR can establish the truth," the company said.
BSGR has been active in Guinea since February 2006 and has invested more than $650m in the country, as part of its efforts to develop iron ore reserves at Simandou and Zogota, on its own account and also with its JV partner Vale.