Australia urged China to deal quickly and transparently with the trials of four Rio Tinto mining staff accused of bribery and stealing commercial secrets, amid growing investor concern over dealing with Beijing.
China on Wednesday indicted the four China-based employees of Rio Tinto, the world’s second-largest iron ore producer, including Australian Stern Hu (胡士泰), its top negotiator at the time of his arrest last year.
“We continue to emphasize to the Chinese authorities the need for the case to be handled transparently and expeditiously,” said a spokesman for Australian Foreign Minister Stephen Smith.
The four are set to stand trial in Shanghai. If found guilty, they could face up to seven years in jail on the commercial secrets charge and up to 20 years on the bribery charge, said Zhang Peihong (張培鴻), a lawyer for one of the accused Chinese nationals, Wang Yong (王勇).
Anglo-Australian miner Rio voiced deep concern about the nature of charges leveled against its staff.
“We are very concerned about the nature of these charges, however, as this part of an ongoing legal process it is inappropriate to comment any further,” the company said in a brief statement.
China is embroiled in a series of trade disputes with other countries, while Internet search engine Google has said it is getting harder to operate in China and has threatened to pull out of the country over censorship and hacking concerns.
At the center of the Rio case is Beijing’s demands for a lower yearly fixed price for iron ore, an essential commodity to drive Chinese steel plants, and Rio’s refusal to lower the benchmark price it had reached with Japanese and South Korean mills.
China expert Hui Feng at the University of Queensland in Australia said the Rio case was a sign Beijing was determined to play tough with foreign firms.
“I think this is a clear signal to foreign business that the government is serious about cracking down on what they see as illegal activities,” Hui said. “In the past, the government largely turned a blind eye to such activities.”
Hui agreed with Google founder Sergey Brin that it was getting harder to operate in China in recent years.
“How to deal with the political risk is the real issue,” she said.
Rio’s share price was up 2.62 percent ahead of its second-half results. The company reported yesterday afternoon a 23 percent slide in half-year profit, its worst second-half profit in three years, dented by a sharp drop in iron ore prices, but the result beat analysts’ forecasts.
Rio said it believed the commodity price recovery would continue this year, showing its confidence in the outlook by declaring its first dividend in a year, although this was lower than some analysts had expected.
July-to-December underlying earnings before one-offs fell to US$3.733 billion from US$4.829 billion a year earlier, compared with analysts’ forecasts of US$3.08 billion on Thomson Reuters I/B/E/S.
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