Australian minister, in China, expresses ’strong concern’ about detention of Rio employee

Australian expresses concern over Rio detention

BEIJING — Australia’s trade minister met Saturday with Chinese officials and said he expressed “strong concern” about the detention of a Rio Tinto Ltd. employee on spying charges, a news report said.

Trade Minister Simon Crean was on a trade mission to Shanghai, where four Rio employees including an Australian citizen were detained July 5. Crean said he met with city officials and expressed “strong concern” about the Australian’s detention, the Australian Broadcasting Corp. reported. It gave no other details of the meeting.

The Rio employees were detained as the world’s third-largest mining company negotiated on behalf of global iron ore producers in price talks with Chinese steel mills. The Australian, Stern Hu, manages Rio’s Chinese iron ore business. The other detainees are Chinese.

The Rio employees are accused of bribing Chinese steel company personnel to obtain summaries of meetings by Chinese negotiators and gain an edge in price talks, according to Chinese news reports.

Australian diplomats visited Hu on Friday, and Foreign Minister Stephen Smith said Saturday that he appeared to be well and raised no health or welfare concerns. Smith said Australia was still asking for details of the case.

China, the world’s biggest steel producer, has criticized iron ore suppliers for repeated price hikes and is pressing for reductions. The other major suppliers are Australia’s BHP Billiton Ltd. and Brazil’s Vale SA.

Information on Chinese steel company ore costs, profit margins and technology spending all are considered official secrets, according to news reports.

The accusations reflect the communist government’s sensitivity about fields such as steel and energy that it deems strategic and its intense secrecy about a wide array of economic and industrial information.

“If you’re foreign, information is power in China, and they tend to think most of their information is national security information,” said Robert Broadfoot, managing director of Political and Economic Risk Consultancy in Hong Kong, who has advised companies on China since the 1970s.

The maximum penalty for an espionage conviction is life in prison.

Rio expressed surprise at the spying allegations and said Friday it is “committed to high standards and business integrity.” It said Chinese authorities have not given the company any details about the case.

Employees of the China Iron & Steel Association, the iron ore price negotiator for Chinese steel mills, are also under investigation, the newspaper 21st Century Business Herald reported. It says an executive who oversaw iron ore purchases for one of China’s biggest steel producers, Shougang Group, was detained this week.

Other Chinese steel companies also are being investigated, the newspaper Oriental Morning Post said.

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Associated Press Writer Kristen Gelineau in Sydney contributed to this report.

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