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Billionaire Beny Steinmetz's mining firm, BSG Resources, could be asked to pay as much as $1.2 billion to its former partner Vale (VALE) after electing not to attend an arbitration hearing in London in a dispute over one of the world's richest mineral assets, Bloomberg reports.

The decision by BSG Resources to back out of hearings earlier this year is likely to cost him the case, the report said.

BSGR sensed it wouldn't be "treated fairly," according to a letter sent by its lawyer Mishcon De Reya to Vale's legal representatives dated Jan. 31 and seen by Bloomberg.

An unfavorable ruling would be the latest setback for Steinmetz, who's facing a number of corruption investigations around the world emerging from his failed investment in the giant Simandou iron ore deposit in Guinea.

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