BHP Billiton Ltd. (BHP) said Tuesday it hasn't been approached by China about any potential investigation into trading practices at its iron ore division, leaving rival Anglo-Australian miner Rio Tinto Ltd. (RTP.AU) in the spotlight.

"BHP Billiton is unaware of any investigation," a BHP spokeswoman told Dow Jones Newswires. A senior executive from Anshan Iron & Steel Group also said no officials from the company are involved in the investigation into the alleged theft of state secrets by Rio employees.

The comments come as the Australian government continues to grapple with how to deal with the Chinese detention since July 5 of four Rio Tinto executives, including the head of Rio's Chinese iron ore division and an Australian citizen, Stern Hu, on accusations they bribed steelmakers to obtain state secrets.

Some analysts and market watchers had speculated that BHP Billiton could also be under investigation by Chinese authorities, given the similarities in its iron ore negotiating strategy.

The Australian government continued to resist calls from opposition lawmakers to intervene at a higher level in the case Tuesday, amid growing fears that the episode could permanently damage economic relations between China and Australia and alter the way international firms do business in China.

Australian Treasurer Wayne Swan, speaking at a Canberra conference on the Australia-China relationship, said that while a swift resolution on Hu's detention is desirable, the government is equally preparing for the "long haul".

Swan said that "megaphone diplomacy" will not resolve any of the issues surrounding the detentions, signaling Australia will continue its behind-the-scenes approach to the matter.

The treasurer told reporters that he was unable to comment on the fallout from what is essentially a Chinese decision.

Rather, the Australian government will seek to resolve the matter in an "appropriate way," he said, taking into account both the interests of Hu, and the interests of the ongoing relationship between China and Australia.

Despite the detentions, discussions between Australia and China to secure a free trade agreement are ongoing and the government continues to welcome foreign investment into Australia, Swan said.

"Australian government ministers, including myself and the prime minister, have been working with key Chinese ministers to find common ground to resolve a number of contentious and sensitive issues between us," Swan said.

Australia's center-left Labor government has been under sustained fire from opposition lawmakers for its perceived lack of action on the Hu case.

But Ross Garnaut, a former Australian ambassador to China and an academic at the Australian National University, defended the Australian government's approach Tuesday, noting that in his experience, situations such as these are best resolved away from the public eye.

"My experience as ambassador in China was that difficult cases of this kind...are best handled away from the megaphones. That helps the Chinese consideration of things and it helps the effectiveness of Australian representations," Garnaut told reporters.

Garnaut said it was "too early to tell" whether the Rio detentions will have ongoing repercussions for Australia's economic relationship with China, or for the way foreign firms do business in China.

"I think it's too early. A lot more facts need to be known before you have a basis for evaluation," he said.

Still, some analysts say the Rio arrests are a wake-up call to Australia about the political risks of doing business in China.

Michelle Applebaum, an analyst with the Chicago-based Steel Market Alliance, said a new economic model is likely to emerge between global iron miners and their single biggest customer, China, from the Rio arrests, as suppliers cut back on cash sales to Chinese steelmakers in favor of European, Japanese and South Korean customers who have already agreed to price cuts in annual price talks.

"Ultimately, it will be the Chinese steelmakers who will now be forced to bear the cost of these new variables - as the iron ore majors and other western companies who depend on sales to China begin to assess the true cost of serving the region," she said, adding: "Bullying behavior backfires."

"In our view, Beijing badly misplayed their hand in the ore negotiations this year, demanding a 40% to 50% price cut while letting other global ore buyers set the new pricing structure, which came in at a cut of 33%," Applebaum said.

"While China was stretching out the negotiations, steel market conditions in the region have improved, and production for the month of June is hitting a new all-time high - reducing leverage and hurting the country's negotiating position," she said.

-By Rachel Pannett, Ross Kelly and Enda Curran, Dow Jones Newswires;

61-2-6208-0901; rachel.pannett@dowjones.com