VALE3 Vale SA

By Konrad Putzier 

A Brazilian mining company is turning to a U.S. court to obtain information related to its allegations that an Israeli diamond trader made undisclosed investments in New York City real estate.

In 2019, Vale SA won a $2 billion arbitration award against a company tied to diamond trader Beny Steinmetz. The Brazilian miner has been trying to collect the money since then, and it has been trying to track Mr. Steinmetz's holdings around the world.

Vale is asking a U.S. District Court in New York to order a number of real-estate companies to turn over information that Vale alleges could show that Mr. Steinmetz made certain property investments, according to an application for a discovery order filed last month with the court.

The mining company alleged in the filing that entities affiliated with Mr. Steinmetz invested in 12 properties in New York City and one in Chicago through a joint venture with New York developer HFZ Capital Group.

A representative for HFZ said in a statement: "HFZ Capital Group has no involvement with Benny Steinmetz or his companies. Mr. Steinmetz is not an investor in HFZ or any of its developments. For some unknown reason, Vale is casting a wide net to harass multiple real-estate companies and drag them into their foreign dispute. HFZ has no information relevant to that dispute and we look forward to the court clarifying these details in the near future."

In a statement, a spokesman for Mr. Steinmetz accused Vale of pursuing a "budget-less scorched earth litigation policy." Vale declined to comment.

The April filing adds a new wrinkle to one of the mining world's most high-profile legal disputes.

A decade ago, Vale and Mr. Steinmetz's BSG Resources Ltd. launched a joint venture to develop a massive iron-ore mine in Guinea. In 2014, Guinea's government revoked the venture's right to develop the mine after an investigation concluded that people close to Mr. Steinmetz bribed a previous administration.

Vale has been trying to recoup the $500 million it paid BSG for a stake in the venture, along with more than $700 million it spent developing the mine.

Following the $2 billion arbitration award in a London court, BSG Resources filed for bankruptcy in the U.S. last year, citing as its only assets a legal claim against investor George Soros.

Write to Konrad Putzier at konrad.putzier@wsj.com

(END) Dow Jones Newswires

May 07, 2020 10:47 ET (14:47 GMT)

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