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Rio employees 'held for espionage'

By Wan Zhihong and Qian Yanfeng (China Daily)
Updated: 2009-07-09 08:57

Four employees of global mining giant Rio Tinto in Shanghai have been detained, apparently on suspicion of espionage and stealing state secrets.

Shanghai's State Security Bureau yesterday confirmed to China Daily that the four were being investigated by the bureau. The bureau would not give a reason why they had been detained.

Three of the four being detained since July 5 are Chinese citizens. The fourth is an Australian named Stern Hu, general manager for China operations at Rio Tinto's iron ore division.

Australian Foreign Minister Stephen Smith yesterday said in Perth that Hu was being held in China on suspicion of espionage and that he had been accused of stealing state secrets.

The employees "have been detained for questioning by the Chinese authorities in Shanghai. The reasons for these actions are unclear," Rio Tinto said in a statement yesterday.

"Rio Tinto intends to co-operate fully with any investigation the Chinese authorities may wish to undertake and has sought clarification on what has occurred," said the statement.

Related coverage: Iron ore pricing   Related readings:  China reportedly inks iron ore deal  Pressure on China to end ore impasse  Rio Tinto-Chinalco $19.5B deal foiled  Chinalco to take up Rio rights issue: source

Business seemed to be normal at the Rio Tinto Shanghai Representative Office in Hong Kong New World Tower, which is located downtown.

Staff members were seen entering and leaving the office but when approached, no one would give any details on the detention of their colleagues.

They either said "no comment" or simply shunned the inquiries. Journalists were also told not to take pictures.

The investigation might be related to bribery at one of the major domestic steelmakers, said a source with a local steel producer, who did not provide further information.

On June 5, Rio Tinto announced it had dumped plans for a major investment deal from Aluminum Corporation of China and instead decided to seal an iron ore joint venture with rival BHP Billiton.

The company and Chinese steelmakers are in the midst of drawn-out iron ore price talks. Steel mills in China are seeking a bigger price cut than the 33 percent agreed to in May between Rio Tinto and Japanese and Korean producers.

The Shanghai office is mainly a sales and marketing office for Rio, the world's second-biggest iron ore producer, which is listed in London and Sydney.