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Anglo-Australian Mining Company Rejects Chinese Accusations

  • Phil Mercer

Anglo-Australian mining company Rio Tinto rejects charges that four of its employees arrested in China were involved in industrial espionage. The company says it is "very concerned" for its workers, held in Shanghai since July 5.

The detention of a senior Australian Rio Tinto executive, Stern Hu, and three Chinese colleagues has strained relations between Canberra and Beijing. China warns that it will not tolerate outside interference in its judicial affairs.

Chinese officials accuse Hu of stealing state secrets and bribing steel mill officials during sensitive negotiations over iron ore prices. Australia is a major producer of ore and China is a significant buyer.

Beijing insists their actions inflicted "huge losses" on China's economy.

Rio Tinto says the allegations that its workers were involved in corruption are "wholly without foundation."

The company Friday said its employees, who have not formally been charged, have acted with integrity.

The Australian government's response has been one of careful diplomacy.

Foreign Minister Stephen Smith has called on China to speed up the investigation into allegations of industrial spying and warns Beijing that the world is watching the case.

"China need to think about whether its handling of this matter has any adverse implications for it," he said. "This is not a matter where the interest is restricted to Australian or Chinese media or to the people of China or to the people of Australia. Other people who trade who do business in and with China will have an interest in the way in which this matter is progressed."

The arrest of the Rio Tinto workers have complicated annual negotiations on iron ore contract prices between Chinese steel mills and Australia's leading mining companies.

Australian Prime Minister Kevin Rudd, a former diplomat in Beijing, has been criticized for not intervening in the case and phoning China's President Hu Jintao.

China is Australia's leading trading partner. Trade between the Asia-Pacific partners was worth 53 billion dollars in 2008, of which the iron ore trade made up 14 billion.

The United States also is urging Beijing to ensure transparency and fair treatment for the staff of all foreign companies operating in China.

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