Rio Tinto pulls out Australian staff from Shanghai office

PUBLISHED : Friday, 17 July, 2009, 12:00am
UPDATED : Friday, 17 July, 2009, 12:00am

Anglo-Australian iron ore supplier Rio Tinto Group has relocated several of its Australian analysts who worked at its Shanghai office, where four of its employees were detained by mainland secret police on spying charges earlier this month, a source said.

The latest development came as calls mounted for the mainland to enhance the transparency of its handling of the case.

Little is known about the underlying evidence supporting the charges levelled against the employees, where they are being detained or their well-being.

'At least a couple of Australian analysts' were known to have left the mainland, the source said.

However, he refused to divulge further details, such as the timing and the reason for the relocation. The departures were believed to have occurred after the dramatic arrests on July 5 of Stern Hu, a Chinese-born Australian and the firm's iron ore marketing chief on the mainland, along with three mainland colleagues, by the Shanghai branch of the State Security Ministry.

'There is no complete halt to their [Shanghai] operation but they apparently scaled it down,' said the source.

The spokesman for Rio could not be reached for comment yesterday. Meanwhile, United States Commerce Secretary Gary Locke, currently on an official visit to the mainland, called on the mainland to provide more information about the arrests.

'All we can say right now to the Chinese government, and I think everyone should simply urge greater transparency and following due process,' Mr Locke said. 'Until people have the full set of facts, how can we make any judgments? We have already communicated some of our thoughts with the Chinese government.'

Mr Locke's comments came a day after a warning by Australian Prime Minister Kevin Rudd that the world is 'watching closely how this case is handled'.

'As the profile of this case has been elevated to a very high level, it can only be resolved by leaders at the highest level as well,' said Friedrich Wu, an adjunct associate professor in international political economy with Singapore's Nanyang Technology University.

An unknown number of mainland steel industry executives have also been interrogated and incarcerated, according to domestic media. They have been accused of leaking information to Rio, which effectively represented the world's three biggest iron ore suppliers in their talks with mainland steelmakers, in return for bribes and other favours.

The Chinese Iron and Steel Association, the semi-official alliance representing mega state-owned steel mills, is now mainly negotiating with Brazil's Vale, according to 21st Century Business Herald. Vale usually plays only a minor role in feeding China's steel industry.

'Reorienting to a new negotiating counterpart at this stage means it might take more time,' said Wang Bin, an executive of Nanjing Daliang Steel Product.

'For big steel mills, [a delay] would not be a problem because of ample stock built up in the iron ore market earlier this year. But the longer it takes, the harder for smaller steelmakers.' Benchmark steel prices have risen 14 per cent in the past three months.