Editors note: A previous version of this article misstated BSG Resources relationship with Vale, in addition to stating BSG Resources paid $165 million for the right to the Simandou deposit, when the company actually was granted the rights and spend the $165 million developing the deposit. The Fool regrets the error. 

In a tale worthy of Charles Dickens, one of the world's poorest countries, Guinea, is home to one of the world's richest mineral deposits, an iron ore resource in the Simandou mountains estimated to be worth $50 billion. Yet it shouldn't surprise anyone that it should also be wrapped in intrigue and allegations of bribery.

After being granted exploration permits in 1997 and a concession in 2006 to develop the Simandou deposit, mining giant Rio Tinto (RIO 1.21%) saw much of its northern rights stripped from it two years later when Guinea dictator Lansana Conte thought the company was behind schedule and granted them just before his death to BSG Resources, a mining operation founded by Beny Steinmetz, one of the world's richest men. After investing $165 million in the project,BSG turned around and sold a 51% stake in the project to Vale (VALE 1.33%) for $2.5 billion in 2010..

Simandou operations. Source: Rio Tinto Simandou

Last year, however, the new, democratically elected government of Guinea launched a probe into the transactions to determine whether bribes were paid by BSG to Comte's wife, an investigation that now includes the FBI -- which arrested a BSG agent in Florida in April for allegedly trying to arrange to have documents related to the bribery scheme destroyed -- and the French and Swiss police.

BSG, naturally, claims innocence, saying the probe is being spurred on by opponents seeking to steal its mining interests, with billionaire investor George Soros and former U.K. prime minister Tony Blair backing the government's investigation. The election of a new president, however, was itself wracked by charges of vote rigging.

With government interference stopping the project and preventing production milestones, payments to BSG by Vale which were set on these milestones, were frozen (with about $2 billion in milestone payments left). Vale executives have held meetings with Guinea's president, Alpha Conde, leading to speculation that if the government strips BSG of its rights to the mines -- as anticipated after it releases its investigation findings next week -- Vale may still be able to secure its hold on the deposit.

Left out is Rio Tinto, which partnered with Chinese miner Aluminum Corp of China (ACH -3.68%) in 2010 for $1.35 billion as its best hope for continuing development of the southern half of Simandou, but pushed back its timetable for developing the $20 billion project while it waits for Guinea to ratify an investment framework for the project -- something it anticipates happening by the end of the first quarter of 2014. 

The miner is under pressure to get the project going. It paid Guinea $700 million in 2011 to settle disputes related to its claim over the Simandou deposit that could have resulted in the government taking a 51% stake in the project, but has until 2015 to start shipping ore. Some analysts doubt Guinea can afford to do that; still, it highlights the strain the miner is under amid attempts to contain costs and cut capital expenditures by $5 billion.

Rio Tinto's partner is also under the gun to cut costs, and transferred 65% of its holding in the project to its parent Chinalco Overseas Holdings for $2.07 billion. The Guinea government has missed its investment framework deadlines before, but with its elections recently sustained by the country's Supreme Court, it may be in a better position to tackle the many tasks before it.

Simandou's deposits are incredibly rich, so much so that it's said to barely need processing. Rio Tinto forecasts its mines alone will produce 39 million tonnes of iron ore in its first year of operation, and as much as 100 million tonnes by 2023.

Even if Vale gets the rights to the iron ore deposit, BSG Resources has threatened a lengthy court battle, which may make developing the project a challenge. In short, it's the best of times and worst of times in Guinea for the miners, who still have a long way to go before the vast riches the mountains contain will ever see the light of day.