Thaindian News

Sydney, July 11 (DPA) Resources giant Rio Tinto Ltd Saturday welcomed news that its Shanghai-based executive Stern Hu was in good health after almost a week in detention over spying allegations.
“Rio Tinto continues to work to support its four China employees and their families and colleagues,” the dual Sydney-London-listed company said in a statement about Hu, an Australian, and three Chinese employees.

The detentions are a diplomatic challenge for Australian Prime Minister Kevin Rudd, a Mandarin speaker and China scholar who has been accused of being too chummy with Beijing.

“Mr Rudd should take this matter up directly and personally with the Chinese government,” opposition Liberal Party leader Malcolm Turnbull said.

A Chinese government website said Hu had “caused huge loss to China’s national economic security and interests” by stealing confidential information on iron ore demand and supply. He is also accused of bribing steel industry officials to secure that data during iron ore price negotiations.

Rio said it had not learned of any charges laid against its staff in China.

Consular officials who met Hu Friday reported him to be well.

“Mr Hu appeared well and raised no health or welfare issues during the meeting,” Foreign Affairs Minister Stephen Smith said in a statement. “Australian officials continue to seek further information from Chinese authorities about the circumstances surrounding Mr Hu’s detention.”

Last week, the Aluminium Corporation of China, or Chinalco, issued a statement saying the case was unrelated to last month’s failed bid to double its stake in Rio.

Chinalco was upset at having its bid to raise its stake to 18 percent spurned. Rio instead opted to merge its iron ore operations in Western Australia with those of archrival BHP Billiton Ltd.

If it had been accepted, Chinalco’s $19.5 billion offer would have represented China’s biggest-ever foreign investment. China alleged the Rio-BHP joint venture concentrates too much market power in the hands of Australia’s top two iron ore producers.

Rio was denounced in the Chinese press as a “dishonourable woman” for negotiating but then rejecting Chinalco’s offer.

The price of iron ore export contracts are set annually and China is under pressure to accept the same figure as Japan and South Korea. China had argued for a 60 percent cut on last year’s fix for Australian iron ore - not the 37 percent discount that other customers agreed to.