Global Voices: Rio Tinto’s Trouble – Commerical Bribery or Espionage?
On Global Voices, Bob Chen translates Chinese media and netizen reactions to the Rio Tinto case:
The state secret involved is said to be confidential documents that gave Rio Tinto the upper hand in its iron ore negotiation with China’s state-owned steel mills. More specifically, it includes detailed information of the industry’s projected ore demand and production data.
In the recent negotiation on long-term fixed price ore contracts, Chinese steel mills demanded a 40% decrease in price, back to the levels of 2007. But Rio Tinto insisted on a cutback of 33% at most, a price already accepted by Japan. The big three iron ore companies in Australia threatened a stoppage of supply to the open market, which meant that China had no recourse if negotiations broke down.
This tough position by the miners is because they have been informed of the forecasts of Chinese steel mills by insiders who took bribes. In past years, although the largest buyer of iron ore in the world, China has suffered from price rises of over 90% since 2004.