China Detains Rio Executive on Suspicion of Espionage

[Coventina]

Source: Bloomberg

July 8 (Bloomberg) -- Rio Tinto Group iron ore executive Stern Hu was detained in China on suspicion of espionage and stealing state secrets, Australian Foreign Affairs Minister Stephen Smith said.

Hu, an Australian and head of London-based Rio’s iron ore operations in China, was detained on July 5, Smith said in Perth today. The executive hasn’t been charged and there wasn’t any indication allegations were business-related, he said, declining to comment on how relations with China would be affected. Three other Rio workers, all Chinese nationals, are also being held.

Rio, whose iron ore contract talks with Chinese steel mills have stalled, was “surprised” by the authorities’ action and is “not aware of any evidence that would support such an investigation,” spokesman Nick Cobban said in an e-mail today. The company hasn’t been able to contact the workers.

“This action is unprecedented in this context and is not good news, is not good for any Western company wanting to do business in China going forward,” John Wong, a fund manager at CQS UK LLP in London, said today by phone. CQS manages the New City Natural Resources Fund investing in mining stocks.



Read more: http://www.bloomberg.com/apps/news?pid=20601081&sid=aIresWdgOf_o

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