Page last updated at 12:58 GMT, Thursday, 9 July 2009 13:58 UK

Rio worker 'stole state secrets'

Rio Tinto ticker
Four Rio employees were arrested at the weekend

China says it has evidence proving that a detained executive of Australian miner Rio Tinto stole state secrets.

Foreign ministry spokesman Qin Gang said that Stern Hu, a Chinese-born Australian, had caused huge losses to China's economic interests.

Australian media has speculated the arrest was sparked by Rio cancelling a $19.5bn (£12bn) Chinese investment.

But Australia's foreign minister said there was no basis to suggestions that the arrest was payback for the deal.

Mr Hu, general manager, iron ore sales & marketing at Rio Tinto's Shanghai office and three of his colleagues have been held for four days now, says BBC China correspondent Chris Hogg.

They are accused of stealing state secrets, an offence that carries a maximum term of life imprisonment, he added.

Australia Foreign Minister Stephen Smith said Australian officials were now trying to see Mr Hu.

The cancelled deal in question was Rio's announcement in February that it was to accept a further $19.5bn of investment from China's state-run aluminium group Chinalco.

The deal would have been a record Chinese investment in a foreign company, but Rio changed its mind last month, cancelling the agreement and instead launching a tie-up with fellow Anglo-Australian miner BHP Billiton.

Chinalco said at the time that it was "very disappointed".

Meanwhile, Australian newspapers have also speculated that the Chinese government is unhappy with continuing iron ore price talks that Rio Tinto is leading on behalf of the big global mining firms.

Accusations 'surprising'

Chinese foreign ministry spokesman Qin Gang said there was "sufficient evidence to prove that they have stolen state secrets and have caused huge loss to China's economic interest and security".

We are not aware of any [spying] evidence that would support such an investigation
Rio Tinto

Mr Qin denied the case was connected to Rio's cancellation of the Chinalco deal, and called on the Australian government not to politicise the case, saying this "would be no good to Australia".

Mr Smith said Australian officials wanted consular access to Mr Hu "to satisfy ourselves as to his welfare, to satisfy ourselves as to his well-being and to get some indication from him as to how we can be of assistance".

He added that the spying accusations were "very surprising".

Rio has said in a statement that it has no evidence of spying.

"We have been advised by the Australian government of this surprising allegation," it said. "We are not aware of any evidence that would support such an investigation."

According to reports in China, an oil ore executive from the country's eighth largest mill has also been arrested.



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