Chinese authorities are detaining Rio Tinto Ltd’s top iron ore negotiator on suspicion of espionage and stealing state secrets, Australia said yesterday, threatening to strain already fraying ties.
Details about the detention of Stern Hu (胡士泰), as well as three other Rio employees, emerged just as a Shanghai paper reported Chinese steel mills have finally given in on annual iron ore prices, agreeing to the same 33 percent cut that other Asian steelmakers set earlier, but for six months instead of a year.
It was unclear whether there was any tie between the two events, but the detention follows a period of increasingly tense relations between the two vast trading partners, with iron ore negotiations running past the June 30 deadline and Rio snubbing a planned US$19.5 billion investment by Chinalco (中國鋁業) last month.
“I see no basis in any of that speculation,” Australian Foreign Minister Stephen Smith told reporters in Perth in response to talk the move was related to iron ore or the Chinalco deal.
Smith also said he was very surprised by the detention and reasons for it and that the Australian government was still trying to seek access to Hu. He said there was the prospect Hu could be charged with criminal offenses under Chinese law.
Rio, which first confirmed the detentions a day ago, said it was aware of the allegation.
“We have been advised by the Australian government of this surprising allegation. We are not aware of any evidence that would support such an investigation,” a Rio spokeswoman said.
Rio said the Shanghai office where the detained staff worked was mainly a sales and marketing operation for the company, the world’s second-biggest iron ore producer, which is listed in London and Australia.
On June 5, Rio announced it had dumped plans for a US$19.5 billion investment from state-owned Chinese metals firm Chinalco and instead sealed an iron ore joint venture with rival BHP Billiton.
Several days later, Xinhua news agency slammed Rio’s “perfidy” for scrapping the deal.
The intrigue over the four Rio Tinto employees threatened to eclipse the potentially bigger news Chinese steel mills had finally backed down on iron ore prices, agreeing to the same 33 percent price cut that Japanese and other mills accepted, according to a report in the Shanghai-based China Business News.
The deal, which could not be immediately confirmed, would conclude some nine months of tense negotiations that threatened to scupper the decades-old annual pricing ritual and would frustrate China’s efforts to wield more clout on global commodity markets, even where it is the dominant buyer, such as iron ore.
The paper, which reported the deal citing sources it didn’t name, said Chinese mills had agreed to the new prices for only six months from April instead of the usual 12, and had already begun negotiating on the next phase.
It said China had agreed to pay US$0.97 per dry metric tonne unit (dmtu) for Pilbara blend fines and US$1.12 per dmtu for Pilbara Blend lump for April through October.
But the paper said its sources could not say which of the big iron ore suppliers had signed the deal.
Several Chinese steel officials contacted yesterday said they were unaware of a settlement.
The head of the market research department at the China Iron and Steel Association declined to comment, although two sources not directly involved in the discussions said they had heard of a possible agreement, but could not confirm it.
Rio and BHP had no comment on the report.
China had initially sought a bigger price cut of up to 45 percent, but last week softened those demands after the June 30 deadline for agreeing terms lapsed, giving miners the right to suspend term deals.
A 33 percent cut would be in line with what analysts have been expecting as Rio Tinto showed no inclination to relax its “take it or leave it” stance on the initial deal, and an economic recovery lifted spot market prices above new contract levels, leaving China with little leverage.
“It’s a report but it is certainly the deal that we expect to be done. It always seemed likely that the outcome would be no change from Japanese settlement,” said Mark Pervan, a senior ANZ commodities analyst.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique