Thursday July 9, 08:20 AM
China confirms Rio Tinto four accused of spying
By Neil Sands
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MELBOURNE (AFP) - Australia has dismissed speculation that China's spying claims against a top mining executive were linked to trade disputes, as Shanghai officials confirmed four Rio Tinto (LSE: RIO.L - news) staff were being held.
Foreign Minister Stephen Smith there was no suggestion that Australian passport-holder Stern Hu's detention was linked to Rio's fraught iron ore talks with Beijing or its recent decision to snub a massive Chinese cash injection.
"I've seen nothing which would cause me to in any way believe or form the conclusion... that the events associated with Mr Hu are in any way related to Rio Tinto's commercial activities," he said.
Hu was detained over the weekend along with three Chinese colleagues who are accused of espionage and stealing state secrets, Shanghai officials confirmed.
The four are being held by China's secretive state security ministry, which handles counter-espionage operations.
Australian foreign affairs officials said they were pressing for access to Hu and repeated that the spying claims came as a "surprise."
"One of the reasons why we want access to him is to satisfy ourselves as to his wellbeing and to get some indication from him as to how we can be of assistance," Smith told public broadcaster ABC late Wednesday.
A Rio Tinto spokesman told AFP it was not giving out any more information on the case due to its "sensitive" nature.
"Rio Tinto has been advised by the Australian Government of this surprising allegation," an earlier company statement said.
"We are not aware of any evidence that would support such an investigation. We will continue to work to support our employees and their families."
The incident has cast a shadow over Australia's relations with one of its largest trading partners, in which Rio Tinto plays a key role as a major supplier of iron ore and other raw materials to China's growing economy.
Last month, the debt-laden miner rejected a 19.5-billion-dollar cash offer from China's Chinalco after deciding that rising commodity prices made a rights issue and joint venture with BHP Billiton (LSE: BLT.L - news) more attractive.
The Anglo-Australian company has also spearheaded difficult talks with China over new iron ore contracts, which missed a key deadline at the end of June.
Australian media have reported speculation that the detentions were linked to alleged manipulation of the iron ore market, while the Chinese press has accused Rio of withholding products to drive up prices.
China's state-controlled Securities Times also quoted unnamed "industry insiders" as speculating the detentions may have been over suspected involvement in bribery.
"I will be fascinated to hear what evidence they have that Mr. Hu is a spy," opposition senator Barnaby Joyce told Sky News.
"It sounds awfully like a trumped-up charge to me."
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