Rio Tinto Reacts To Chinese Bribery Allegations

ADELAIDE, Australia (AP) -- Bribery allegations against four Rio Tinto Ltd. employees detained in China are "wholly without foundation," the mining giant said Friday, as Australia continued to press Beijing for details of a case that is straining ties between the two nations.

Rio Tinto's iron ore chief executive Sam Walsh said the company is very concerned about its employees, who were detained July 5 on spying charges while Rio was acting as lead negotiator for global iron ore suppliers in contentious price talks with Chinese steel mills. Three of the detained employees are Chinese nationals and one is an Australian, who heads Rio's iron ore business in China.

"Rio Tinto believes that the allegations in recent media reports that employees were involved in bribery of officials at Chinese steel mills are wholly without foundation," the statement said. "We remain fully supportive of our detained employees, and believe that they acted at all times with integrity and in accordance with Rio Tinto's strict and publicly stated code of ethical behavior."

The miner's statement comes after a Chinese government-owned newspaper alleged Wednesday that executives from all 16 Chinese steel mills participating in iron ore price talks were bribed by Rio Tinto employees.

The English-language China Daily quoted an unnamed "industry insider" saying that the Anglo-Australian mining giant bribed China's largest steel companies, all members of the China Iron & Steel Association, to get access to industry data. The 16 companies were not named.

The communist government considers information about steel production, sales and iron ore costs to be secret, according to state media.

China's booming steel industry consumes up to 60 percent of global iron ore production and Beijing is pressing for deep price cuts after two years of increases totaling more than 120 percent. The iron ore talks have failed to produce an agreement on prices for the buying year that began July 1.

Australia has pressed China for details on the detention of Stern Hu, the Australian, but little information has been forthcoming, and China warned Australia on Thursday not to interfere in the case.

Australian Foreign Minister Stephen Smith met with Chinese Vice Foreign Minister He Yafei in Egypt on the sidelines of a conference there Thursday.

Smith told Australian Broadcasting Corp. radio that he had "politely, but firmly" informed He that Australia wanted the case resolved quickly.

"When I had my conversation with Vice Minister He, I made the point that Australia understood that this was a matter before Chinese legal and potentially judicial processes," Smith said. "I'm proceeding on the basis that there is an investigation, (and) that investigation has not come to a conclusion."

Smith rejected suggestions China had already determined Hu's guilt.

"That doesn't sit with the meeting that I had and the statements made to me," he told ABC radio.

Prime Minister Kevin Rudd on Wednesday warned China the world is watching its handling of the case and said Beijing should consider its economic ties as it deals with the Rio employees.

China responded Thursday by saying any interference in the case was not in Australia's interest.

Rio Tinto said in the statement that it continues to operate in China and is maintaining high levels of iron ore shipments from Australia.