China's Rio Tinto inquiry widens

China has extended its investigations into alleged spying and bribery by Rio Tinto employees to executives of five Chinese steelmakers.

Baosteel Group, Anshan Iron & Steel Group, Laigang Group and Jigang Group are being probed, the China Daily said.

An executive at another major producer, Shougang Group, was detained last week, news reports said.

Australian Rio worker, Stern Hu, and three of the firm's other employees were detained in China last week.

The men are accused of stealing state secrets and have faced accusations of bribery.

Scrapped deal

Mr Hu's arrest has created a political and diplomatic problem for Mandarin-speaking Prime Minister Kevin Rudd, who has made improving relations with Beijing a priority.

Australian Treasurer Wayne Swan has said the case of Mr Hu should be handled quickly.

Analysts say it has also cast a shadow over resource-rich Australia's trading relationship with China, which was worth $58bn in 2008.

In June, Rio scrapped a $19.5bn (£12.1bn) deal with China's state-owned Chinalco in favour of a tie-up with rival giant BHP Billiton, which angered some in Beijing.

Negotiations

Baosteel, Shougang and Angang are among the 16 delegation members at the talks for fixing 2009 iron ore prices, the China Daily reported.

It said the annual talks, which were supposed to conclude by 30 June, were continuing despite the arrests and investigations.

Rio Tinto was acting as lead negotiator for global iron ore producers in talks with Chinese mills on the price for annual supply contracts.

The Rio employees are accused of bribing Chinese steel company personnel to obtain summaries of the negotiators' meetings, according to Chinese news reports.

In Canberra, Australia, the Chinese ambassador was again called in to the foreign ministry on Tuesday, the third summons in a week.

Australia's opposition is pressing for more aggressive action on Mr Hu's arrest, but Finance Minister Lindsay Tanner said "yelling and screaming" would not help.

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