SHANGHAI (AFP)--Strained price negotiations between China's
steel mills and iron ore producers are continuing, a Chinese
official said Monday, despite Rio Tinto Plc's (RTP) lead negotiator
being arrested on spy charges.
The China Iron and Steel Association, which represents Chinese
mills in the talks, said the negotiations hadn't been suspended
after Rio Tinto executive Stern Hu, who represented producers, was
arrested last week.
"It's still underway," a steel association official said on
condition of anonymity due to the sensitivity of the issue.
China's foreign ministry last week said it had proof Hu, an
Australian national, and three Chinese Rio Tinto colleagues stole
state secrets, endangered national security and caused China to
suffer huge economic losses.
Security officials, in a statement published by China's
state-run media, accused Hu and the others of plying Chinese steel
executives with bribes in exchange for industry information.
Australian foreign minister Stephen Smith said the Chinese
government had confirmed Hu's detention on July 5 was linked to the
iron ore talks.
When asked who would represent Rio Tinto at the talks in Hu's
absence, another steel association official declined to comment,
saying any discussion of the talks required high-level
approval.
Rio Tinto spokesman Gervase Green said it was company policy to
not discuss the talks.
The talks between Chinese mills and Rio, the world's
third-largest miner, to set iron ore prices for the coming year,
missed a key deadline on June 30.
Last week, China Business News, a Shanghai-government linked
financial newspaper, reported after the detention of the Rio
employees the association had accepted the same 33% price cut Rio
had set for other Asian mills.
China entered the negotiations, demanding at least a 45% price
cut, although both iron ore and steel markets recovered this year
partially on hopes for improved demand from China.
However, state-run economic magazine Caijing reported in the
days leading up to Hu's arrest that the steel association had had
no substantive discussions with the three global miners - Rio Tinto
and BHP Billiton Ltd. (BHP) of Australia and Brazil's Vale S.A.
(VALE) - since mid-June.
Rio has said it wasn't aware of any evidence against its four
employees whose arrests have cast a shadow over one of Australia's
most important trade and diplomatic relationships.