Australia has demanded consular access to a senior Rio Tinto mining executive being held in China on suspicion of espionage. China has confirmed four Rio Tinto workers are charged with stealing state secrets. The arrests come amid tough price negotiations between the Anglo-Australian resources company and Beijing, as well as failed bid by the Chinese for a multibillion dollar stake in Rio Tinto.
Australian citizen Stern Hu was detained Sunday by officials from China's Ministry of State Security. The three other Rio Tinto employees arrested are reported to be Chinese nationals.
Conservative politicians in Australia believe the arrests could be linked to China's anger at its failure to secure an 18 percent stake in Rio Tinto, as well as Beijing's frustrations about protracted talks with the giant Australian mining company on the price of iron ore, a key component in the making of steel.
China has demanded sweeping price cuts, which have been rejected by Australia's resources sector.
Rio Tinto, the world's third-largest mining company, is leading negotiations for global iron ore suppliers in price talks with Chinese mills. The two sides failed to reach an agreement by a June 30th deadline.
Investors are worried that allegations of industrial spying could damage lucrative ties between Australia and its biggest trading partner. A previous period of sustained economic growth in Australia was fueled by China's seeming insatiable appetite for its minerals.
The suggestion that Hu's detention is linked to sensitive commercial issues has been dismissed by the Australian government.
Foreign Minister Stephen Smith says Australian diplomats must be allowed to visit him.
"We want access to him to satisfy ourselves as to his welfare; satisfy ourselves as to his well-being. In terms of the stated reason for his detention - espionage and stealing of state secrets - as I say, that very much surprised us," he said.
Hu is one of four Rio Tinto employees arrested in China. It is reported the three other detainees are Chinese citizens.
In a statement, Rio says it has been unable to contact any of its workers held in China. The company is seeking clarification from Beijing about the case and insists it will "cooperate fully with any investigation the Chinese authorities may wish to undertake."
China's laws on industrial espionage give authorities wide powers when deciding how to prosecute. The government in Beijing treats an array of economic and other data as state secrets.
In 2002, a Chinese-born American, Fong Fuming, was jailed for paying bribes to help investors obtain secret information to bid on energy projects. Fong was sentenced to five years in prison but deported from China after spending three years in custody.