BUSINESS: Mahmoud Thiam: Guinea’s $200m Technocrat from UBS

The following is an account of the Simandou affair by Guinea’s former mining minister. It is not intended to reflect the opinions of all sides to Rio Tinto’s current lawsuit.

A MAN MUST FIND HIMSELF in a very special position before is able to deny accepting a $200m bribe. 

Mahmoud Thiam’s life and career has never been dull.

Born in Guinea, Thiam left when he was seven in the early 1970s, after his father, a banker, was murdered by Guinea’s dictatorship. He went to live with his uncle, a diplomat for the UN, moving from country to country and studying at French-speaking schools.

Academically he flourished and gained a place at Cornell, studying agricultural economics, before starting “a venture with some partners” in New York. The firm was licensed to trade agricultural commodities on behalf of the US commerce department, he explains, in competition with EU subsidy programs.

After a “catastrophic business transaction” involving Angola, Thiam left and joined Merrill Lynch. “I rose fairly quickly,” he says. “I think it was more by luck and circumstance than by my own merit I guess, but I was lucky enough to develop my business very fast at Merrill.”

Thiam built his own investment banking team that became largely autonomous, jumping from debt restructuring to telecoms after Russia’s debt crisis in ’98, before expanding into commodity-backed finance and advisory work for finance ministries, central banks and “arch-business concerns”, including Chinese and Indian groups seeking mining investment in Africa


“We were being courted very aggressively by a number of banks,” Thiam says. “We were very well treated and very comfortable at Merrill so we didn’t consider it, but just after 2000, we noticed that Merrill might go through an aggressive contraction.”“We had a very large transaction pending and were afraid that our business would get harmed if Merrill could not deploy the resources, so when we felt Merrill being a little hesitant, we contacted the banks that had been courting us and put them in competition.”

The move was so lucrative for Thiam and his team that his secretary is said to have earned $500,000 in the subsequent transfer to UBS.

Flying to Guinea 

By the time he left Merrill Lynch, mining, oil and gas was Thiam’s main business, but his banking career on Wall Street was cut short when he was invited in 2008 to become Guinea’s mining minister.

“An individual who knew of me and my work at the bank and was familiar with me, was picked out to become prime minister by the military,” Thiam recalls. “They wanted a civilian technocrat to come in and run a mostly civilian government.”

The new prime minister, Kabine Komara, had been a director at a trade finance bank based in Cairo. He telephoned Thiam and offered UBS an advisory mandate over Guinea’s mining industry. Thiam agreed, on the basis that Komara appoint a mining minister “who understands the language of the markets. His response was, ‘Why don’t you recommend some one you think you can work with?’” Thiam says he put forward three candidates for the ministry, but the military insisted to Komara that Thiam take the role himself. “I rejected him. 

It took three weeks of going back and forth and I finally accepted. It was absolutely unexpected. It was even very unwelcome if I might say.”

Rio Tinto

In the final six months of the former president’s regime, Rio Tinto’s rights to half of its multi-billion tonne Simandou iron ore deposit, deep in Guinea’s interior, had been stripped from the group and awarded to BSGR, the private mining arm of diamond tycoon, Beny Steinmetz.

Six years later and lawsuits are flying: corruption enquiries funded by financier George Soros have stripped BSGR of its rights, Rio is suing both BSGR and Brazil’s Vale, which bought into the contested blocks for $2.5bn in 2010, whilst BSGR is seeking arbitration with the World Bank.

Mahmoud Thiam is an unlikely linchpin in the affair. Rio has accused him of hosting dinners between Beny Steinmetz, Guinea’s former president and Vale’s then chief executive, Roger Agnelli. “A guy can marry a former hooker and only discover years later that his wife used to be a prostitute,” Agnelli has since said of his dealings in the country.

Rio says Thiam took a $200m bribe from Steinmetz, using the proceeds to buy a country estate and an apartment in Manhattan. As minister, he took to speeding a Lamborghini around Guinea’s capital Conakry, according to reports, collecting suitcases of cash from corporate jets and distributing 

them to military leaders.Testing the WaterThiam chuckles at the charges, but is clearly perplexed. Guinea’s former president never set foot in his house, he says, and the pair have never had dinner together. The flat in Manhattan was meanwhile paid for in 2006.

BSGR has been repeatedly accused of “flipping” its half of Simandou to Vale, construed as proof of corruption, though Rio has also admitted it was in negotiations with Vale, holding a string of meetings in New York.

Most bizarre, is that Thiam was not even mining minister when Rio publicly announced it had been stripped of its rights, nor when they were awarded to BSGR. The ministers responsible for the decision went unnamed in Rio’s charges because they have since returned to power under the presidency of Alpha Conde, Thiam contends.

Information & Belief

Rio’s evidence appears to rest on a report by one private detective, a former CIA operative, Stephen Fox. 

Thiam says his rubbish has been raided by Fox and believes he is under surveillance.

Accusations in Rio’s legal papers are repeatedly fronted by the caveat, 

“On information and belief...”, a legal escape clause that exempts Rio from defamation if its allegations are found to lack substance. It has also lowered the bribe it says Thiam received to at least $100m, raising questions as to the evidence on