China confirms arrest of four Rio Tinto staff for spying (Roundup)

Jul 9, 2009, 11:44 GMT

   Beijing - China on Thursday confirmed that police have detained four employees of the giant Anglo-Australian miner Rio Tinto for 'alleged stealing of state secrets.'

   Those detained include Stern Hu, an Australian citizen who is the general manager of Rio Tinto's Shanghai office, government media quoted Shanghai state security officials as saying.

   Three Chinese citizens employed by Rio Tinto's Shanghai office were detained on the same charges of espionage, in a case that had 'seriously harmed China's economic interests and security,' Foreign Ministry spokesman Qin gang told reporters.

   Qin said China was still investigating and would 'handle the case properly according to law.'

   'This is an individual case and should not be exaggerated or even politicized,' he said.

   The Chinese government would 'continue holding a positive attitude on economic and trade cooperation between China and Australia,' Qin said.

   Hu was also in charge of his company's iron ore business in China, reports said.

   Australian Foreign Affairs Minister Stephen Smith said his ministry called in the acting Chinese ambassador on Thursday and was later told that China had agreed to a consular visit to Hu on Friday.

   The arrests come amid negotiations between Rio Tinto and Chinese steel producers over annual contracts for iron ore.

   The talks passed a June 30 deadline without agreement, as the Chinese steel firms continued to demand larger price cuts than the 33 per cent offered by Rio Tinto.

   China's official Xinhua news agency quoted Rio Tinto as saying in a statement on Thursday that it heard of the 'surprising allegation' against its Shanghai staff via the Australian government.

   'We are not aware of any evidence that would support such an investigation,' the agency quoted the statement as saying.