Page last updated at 07:13 GMT, Wednesday, 15 July 2009 08:13 UK

Australia warns China on spy case

PM Kevin Rudd, 17th April 2009
Mr Rudd has come under pressure over the spying case

Australian Prime Minister Kevin Rudd has warned that China has big economic interests at stake in the case of a mining executive accused of spying.

He said the matter was being watched closely from abroad.

Mr Rudd has been under pressure at home to be more assertive with China, to better protect the detained Australian citizen, Stern Hu.

China says it has evidence of spying, bribery and theft of state secrets in a widening probe of the steel industry.

"Australia of course has significant economic interests in its relationship with China, but I also want to 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," Mr Rudd told a press conference.

The Shanghai-based staff of the Anglo-Australian mining firm Rio Tinto, including Australian Stern Hu, Rio's top iron ore salesman there, are accused of stealing state secrets from Chinese steel mills.

China has widened its investigation into the industry's workings by investigating executives at Chinese state-owned steel firms in recent days.

Investigation

Rio Tinto mine
Rio Tinto said markets remained tough

Also on Wednesday, Rio Tinto reported second-quarter results, indicating that markets were remaining tough with demand slowing.

Production of bauxite, alumina and aluminium were all reduced, but on the upside iron ore production rose for the three month period by 8% from a year earlier.

Rio Tinto has not yet finalised price settlements for iron ore sales to certain customers, including steel mills in China. But deals with Japan, Korea and Taiwan have been reached.

"Deliveries continue to other customers on a provisional price or spot sales basis," said Rio Tinto chief executive Tom Albanese.

Reports suggest the spying case is complicating talks between China and iron ore suppliers around the world.

Cutting debt

In June, Rio Tinto abandoned a $19.5bn deal with China's state-owned Chinalco in favour of a tie-up with rival giant BHP Billiton, to the anger of some in Beijing.

The firm has been seeking to reduce the $38bn of debt it took on to buy the Canadian aluminium group Alcan in 2007.

In its second-quarter results, Rio said it had continued to press ahead with steps to cut costs and bring down levels of net debt.

After it pulled out of its deal with Chinalco, Rio sought other ways to raise cash. Recently it completed a £15.2bn rights issue and the firm is to offload investments worth £3.7bn.



Print Sponsor


SEE ALSO
China's Rio Tinto inquiry widens
14 Jul 09 |  Business
Rio detainee is 'in good health'
11 Jul 09 |  Business
Rio 'surprise' at bribery claims
10 Jul 09 |  Business
China arrests Rio Tinto executive
08 Jul 09 |  Business
Rio Tinto scraps China firm deal
05 Jun 09 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites

FROM OTHER NEWS SITES
Mineweb Rio very concerned over China detainees, categorically denies bribery charges - 3 hrs ago
CNBC Rio Tinto Says China Steel Bribe Claims Unfounded - 5 hrs ago
Forbes.com Rio rejects Chinese bribe reports - 6 hrs ago
IndustrySearch China hits back on Rio spy affair, war of words hots up - 10 hrs ago
Moneyweb The US cavalry comes to Rio's aid - 23 hrs ago



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2013 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific