Rio Tinto looking to grow relationship with China

Tinto said Sunday it wanted to grow ties with China despite four employees being charged with bribery and industrial espionage, as rival BHP Billiton looked to the Asian giant to underpin growth.

The biggest shareholder in Rio Tinto, the world’s third largest mining company, is Chinese aluminium maker Chinalco.

“We would like to build relationships with China and I think that that can take place over a number of different areas,” Rio’s chief financial officer Guy Elliott told Sky News.

Elliott’s statement comes after China said last week that Rio Tinto executive and Australian passport-holder Stern Hu face trial in Shanghai along with three Chinese colleagues on bribery and industrial espionage charges.

The four, detained last July during fractious iron ore contract talks, are accused of using their “positions to obtain benefits for others and on many occasions solicited or accepted bribes,” Chinese state news agency Xinhua has reported.

Rio Tinto has previously said it is not aware of any wrongdoing by its employees while the Australian government and US and European business leaders in China have called for transparency in the prosecution of the four.

The employees were arrested just weeks after Rio walked away from a massive cash injection from state-run Chinalco, which would have given China, a key consumer of raw materials, an important presence in Australia’s vast resources sector.

The case briefly snarled diplomatic ties between China and Australia, which have become major trading partners as the Asian giant seeks commodities and energy to feed its rapid industrialisation.

BHP Billiton Chief Executive Marius Kloppers, said the case had been a “great concern”, but added that China’s human rights record had to be balanced against its achievement in lifting hundreds of millions of people out of poverty.

“Obviously the Stern Hu events of last year and continuing to this year gave us great concern,” he told ABC television in comments broadcast Sunday.

“Particularly for Chinese staff who stand in front of customers every day doing the same job. And that created some anxiety, but luckily we were able to do business as usual pretty much throughout that period.”

Kloppers said rapidly industrialising countries such as China would likely support growth in commodity prices, as developed economies emerged from the global slowdown more gradually.

He said that while the mining giant was cautious about the global economy — despite last week announcing its half-year profit had more than doubled to 6.14 billion US dollars — it was “relatively optimistic” about commodity prices.

Kloppers said his company had completed an analysis of China’s ramped up steel production and was confident that “this trend is going to go on for the 20 years that we forecast.”

China is a key market for both BHP Billiton and Rio Tinto, among the world’s top three exporters of iron ore, a crucial ingredient in steelmaking.
Source: AFP

Leave A Reply

Your email address will not be published.