China accuses Rio Tinto of bribery

Stephen McDonell, Beijing

Last Updated: Wed, 15 Jul 2009 19:34:00 +1000

Chinese state media is reporting that British-Australian mining company Rio Tinto tried to bribe executives from 16 major steel mills.

The China Daily reports Rio Tinto targeted key executives of Chinese firms who negotiate iron ore prices with large foreign suppliers.

It has been more than a week since the Chinese government detained Rio Tinto executive Stern Hu - an Australian citizen - on suspicion of industrial espionage.

Mr Hu runs Rio Tinto's iron ore operations in China.

A senior manager at a large steel company, who requested anonymity, told the Daily that executives of steel mills receive sensitive industry information from the China Iron and Steel Association.

The source claims Rio Tinto bribed the executives for industry data and if refused their supplies were cut - making acceptance of bribery an unwritten industry practice

Closely watched

Meanwhile Australian Prime Minister Kevin Rudd says he has made it clear to the Chinese Government he is taking a personal interest in Mr Hu's case.

Mr Rudd discussed the case with a senior Chinese official in Italy last week.

He says the China has been made aware that he and the rest of the world are watching the case very closely.

Mr Rudd acknowledges Australia has economic interests to protect, but says China also has a lot to lose.

"I'll also remind our Chinese friends that China, too, has significant economic interests at stake in its relationship with Australia and with its other commercial partners around the world," he said.

"A range of foreign governments will be watching this case with interest and will be watching it very closely and they'll be drawing their own conclusions as to how it is conducted."

Criticism dismissed

But China insists trade relations with Australia will not be harmed by Mr Hu's detention.

Commerce ministry spokesman Yao Jian says relations will definitely not be affected by an individual case and dismissed criticism that the case would hurt China's business reputation.

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