Rio Tinto Staff Face Spy Charges in China

By Joe McDonald and Rohan Sullivan

BEIJING -- Four employees of Anglo-Australian mining giant Rio Tinto (RTP Quote) have been arrested on charges of stealing state secrets, a government news agency reported Thursday.

The Xinhua News Agency report, China's first public confirmation of the case, gave no details of the charges against the employees of Rio's Shanghai office. Australia's government says one of the detainees is Australian and it is pressing for access to him.

The weekend detentions came amid contentious iron ore price talks between Rio and Chinese steel mills. But there has been no indication whether the case is linked to the negotiations.

China's vague spying and national security laws give authorities wide latitude in deciding what to prosecute. The government treats a sweeping array of economic and other data as state secrets.

The maximum penalty for a conviction on espionage charges under Chinese law is life in prison. A formal arrest in China means an almost automatic conviction.

The Rio employees are accused of "alleged stealing of China's state secrets," Xinhua said, citing state security officials in Shanghai.

The detained Australian, Stern Hu, is the Shanghai-based general manager of Rio's Chinese iron ore business, according to the Australian government. It says the three other detainees are Chinese nationals.

Meanwhile, a Chinese steel executive who had "close contact" with Hu has been detained by Beijing police, the newspaper 21st Century Business Herald reported Thursday.

Tan Yixin, general manager of Shougang International Trade & Engineering Corp., oversaw iron ore purchases, the Herald reported, citing unidentified sources. It gave no indication whether the two cases were linked.