Chinese probe bribery allegations against Rio Tinto staff

China has told Australian officials it is conducting a criminal investigation of Rio Tinto employees with a focus on commercial and economic issues rather than espionage, Australia’s foreign minister said today.

China detained Australian citizen Stern Hu and three other employees on July 5, as Anglo-Australian Rio Tinto was acting as lead negotiator for global iron ore suppliers in contentious price talks with Chinese steel mills.

State media have said they are accused of bribing executives from Chinese steel mills to get access to industry data, which the Communist government considers secret.

“It’s quite clear they are focusing on a criminal or judicial investigation, relating to the 2009 iron ore negotiations,” Stephen Smith said.

“That is their clear focus, they’re not interested in what we would regard as espionage, or national security matters. These are commercial and economic matters, which, under their general definition of state secrets, is included.”

The case has strained ties between the two countries, with Australia warning China of the economic repercussions and Beijing telling Canberra not to interfere in state matters.

Mr Smith, speaking from Jakarta, Indonesia, said Chinese officials have told Australia that their investigation is ongoing and the full details will be known if Hu is charged.

He said Australia is seeking more details, but Beijing has not been forthcoming.

“It’s quite clear more information is required but that is now clearly bound up, so far as the Chinese are concerned, in an ongoing investigation,” Mr Smith said.

China’s booming steel industry consumes up to 60% of global iron ore production, and Beijing is pressing for deep price cuts after two years of increases totalling more than 120%. The iron ore talks have failed to produce an agreement on prices for the buying year that began July 1.