The Australian iron-ore giant has walked away from price negotiations with China, the world's biggest steel producer. Rio had been acting as point man in the talks, which began in the spring, essentially representing itself and the world's two other major ore producers,
"At this point in time we're not negotiating," said Sam Walsh, chief executive of Rio's ore business, the
reported. Walsh added that talks may resume. "I expect they will, but I don't know when."
The entire affair has been tenser than a Cold War summit.
China has been holding out for a more than 40% price reduction from last year's contract with ore producers. Steelmakers in Japan and Korea agreed back in May to a 33% cut.
Tensions between China and Rio grew when the mining company spiked a deal with Chinalco, in which the huge Chinese aluminum producer would have invested billions of dollars in the debt-laden Rio. (The company decided to form a joint-venture with rival BHP instead.)
Matters then reached a boiling point -- not to mention a spy novel-esque one -- when China arrested four Rio executives traveling in the country in July, later charging them with bribery and commercial espionage. (One wonders if Rio has looked into selling the film rights.)
Walsh was diplomatic in his comments Friday.
"We are respecting the judicial system and we're pleased that our four employees have been able to hire top-notch lawyers," Walsh said, according to he
report. "We're supporting but standing back from that process and allowing the judicial system to take effect."
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.