UPDATE 3-Guinea mining committee completes review of BSGR permits

* Guinea is reviewing permits awarded under previous regimes

* Says investigating whether BSGR bribed officials

* Report will be submitted to inter-ministerial body

(Adds BSGR comments)

By Saliou Samb

CONAKRY, Feb 8 (Reuters) - Guinea's mining contract review committee has completed its report on BSG Resources' (BSGR) mining licenses and will submit recommendations after the company's response, which it expects within two weeks, the committee's president said.

Guinea is currently reviewing mining permits granted by previous administrations.

It is investigating whether BSGR, the mining arm of Israeli billionaire Beny Steinmetz's business conglomerate, bribed officials to obtain licenses, including rights to develop the northern part of Simandou, one of the world's largest untapped iron ore deposits.

BSGR has strongly and repeatedly denied any wrongdoing. It said it would start international arbitration against Guinea should the government revoke its mining rights.

BSGR, which has since entered a joint venture called VBG with Brazilian miner Vale VALE5.SA , also holds the mining rights to the Zogota iron deposit.

"The final report containing our recommendations to be submitted to the strategy committee is already complete," Nava Toure, the review committee's president, told Reuters on Saturday, declining to give details of the body's findings.

"But we have the obligation to submit it to VBG so they can assess it and give their response," he said.

An inter-ministerial strategy committee will then decide the fate of the permits. Toure has previously stated that potential sanctions against the company could go as far as withdrawing BSGR's permits.

"VBG was created with the blessing of the government and remains Guinea's best chance of achieving production at Simandou," a BSGR spokesman wrote in an emailed reply to Reuters' request for comment.

"The committee is using fabricated evidence, but the reality is BSGR followed the law," he said.

A company spokesman told Reuters last week that BSGR was open to a settlement with the Guinean government provided that it kept its 49 percent stake in the projects. It also wants third-party guarantees that its investment capital would not be put at risk. News Search ID:nL5N0L91Q8

The dispute has halted the development of Simandou, which once operating would give a much-needed boost to Guinea's economy.

Most large miners have in recent years halted or slowed expensive growth projects in politically risky regions to focus on cutting costs at their existing mines.

Anglo Australian Rio Tinto RIO.AX spent millions trying to develop the whole Simandou project until 2008, when former President Lansana Conte's government revoked its permit for the northern half, arguing Rio had moved too slowly. The concession was then transferred to BSGR.

Rio is now focusing on developing the southern part of Simandou together with Chinese partner Chinalco but said it is unlikely to start production until at least 2018 since billions of dollars would need to be invested in building infrastructure to export the ore.

(Additional reporting and writing by Joe Bavier; Editing by Ruth Pitchford)

((joe.bavier@thomsonreuters.com)(+225 07074101)(Reuters Messaging: joe.bavier.thomsonreuters.com@reuters.net))

Keywords: GUINEA MINING/BSGR