Rio Tinto Group, deadlocked in talks on iron ore prices with Chinese steel mills, said four of its employees have been detained for three days in Shanghai.
Rio hasn’t had contact with the workers from the Shanghai office since they were detained July 5, and doesn’t know why they are being held, spokesman Nick Cobban said yesterday. Stern Hu, an Australian national and head of Rio’s iron ore operations in China, was arrested by the Public Security Bureau on the weekend, Australian Senator Barnaby Joyce said today. A media official at Shanghai’s Public Security Bureau wouldn’t comment, saying they are checking with other departments.
Steel mills in China, the world’s largest buyer of iron ore, are seeking a bigger price cut than the 33 percent agreed on in May between London-based Rio and Japanese, Korean and Taiwan producers. Rio last month abandoned a $19.5 billion investment by Aluminum Corp. of China, four months after agreeing to what would have been China’s biggest overseas investment.
The Australian Foreign Affairs Minister announced that the four were being held on suspicion of espionage. From Xinhua:
“This afternoon (Wednesday) Australian officials were advised that the reason for Mr. Hu’s detention was that he was being detained on the suspicion of espionage and stealing state secrets,” he said.
While talking with Chinese officials in China, Australian officials learned that the four were detained on “espionage and stealing state secrets,” the minister said.
See also a report from The Australian.