Wednesday, March 17, 2010, 3/17/2010 04:35:00 PM

Chinese Trial Involving Rio Tinto Execs to Commence Monday, March 22

By Todd

BusinessWeek is reporting that four Rio Tinto Group employees, including the company’s iron-ore chief in China, will stand trial in Shanghai on March 22, almost nine months after being arrested on suspicion of bribery and stealing state secrets.

Australian Stern Hu will be tried with his colleagues by the Shanghai No. 1 Intermediate People’s Court, Australia’s Department of Foreign Affairs and Trade said today in an e- mailed statement. Rio confirmed the trial date by e-mail.

The detention last July frayed Chinese ties with Australia, coming a month after Rio had rejected a $19.5 billion investment from state-owned Aluminum Corp. of China. Both companies this week said they sought to invest together, signaling an attempt to repair relations. China had already downgraded the charges against the four to bribery and infringing commercial secrets.

“An outcome, whatever it may be, is going to happen sometime soon rather than being in a state of limbo,” said Tim Schroeders, who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne and holds Rio shares. “To have some certainty and not have this lingering is good for the company and good for the individuals and allows the healing process to continue.”

London-based Rio, the world’s third-largest mining company, gained 2.6 percent to 3,797 pence by 11:09 a.m. in London. The stock rose 1.6 percent on the Australian stock exchange.

The parts of the trial relating to the charges of receiving bribes will be open and Australian consular officials will attend, the foreign affairs department said. Australia has asked for a reconsideration of the decision to keep those sessions dealing with infringement of commercial secrets closed, it said. Hu, Liu Caikui, Wang Yong and Ge Minqiang were indicted Feb 11.
“Rio Tinto reiterates its hope for a transparent and expeditious process for its employees,” the company said.

The trial will take place after talks between Rio, Vale SA and BHP Billiton Ltd., the three biggest suppliers of iron ore, and their customers to settle this year’s prices stalled.

China, the world’s biggest buyer of the steelmaking raw material, last year refused to accept prices agreed between Rio and other Asian producers, saying they were too high.

“The Chinese government is trying to repair its relationship with Australia by downgrading Hu’s alleged crime,” said Tu Xinquan, a researcher at the University of International Trade and Finance in Beijing. “Detaining the Rio employees didn’t give China a bigger say in the iron ore negotiations.”


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