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Rio Tinto Group

Stern who? Rio's China relations move on

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Howard Winn

You get the impression that Stern Hu is one name that Rio Tinto chief executive Tom Albanese never wants to hear again.

At a press briefing in Shanghai he was reluctant to talk about the former head of Rio's China operations who was jailed earlier this year for accepting bribes and stealing trade secrets.

'We've said quite a lot about that - I think we have been very open. I'm not sure there's more I can say,' Albanese said yesterday.

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On Thursday night in a wide ranging speech to a Melbourne Mining Club dinner in Shanghai he said that China, as Rio's biggest customer, was central to the company's success. But at the same time he talked about developing a relationship that went beyond customer and supplier to one of partnerships as China assumed an increasingly important position in the mining sector and with Rio.

Although Albanese did not mention Stern Hu by name it is clear that his trial and conviction looms over the new talk of partnerships and long term co-operation with China in contrast to the somewhat edgy, arguably more aggressive relationship that marked their dealings with each other in previous years.

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Hu, an Australian citizen, along with three other Rio Tinto officials based in China, were arrested a year ago and pleaded guilty at a trial earlier this year to accepting bribes and stealing trade secrets in the multibillion-dollar iron ore business.

The arrests were widely viewed as retaliation for the breakdown of a US$19.5 billion investment by Chinese aluminum producer Chinalco in Rio Tinto. The collapse of that deal infuriated the Chinese, but Hu's guilty plea was acutely embarrassing to Rio Tinto. At the same time there were tensions over the collapse of negotiations to agree the benchmark price for iron ore, a system which has since been replaced by a quarterly pricing mechanism.

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