Rio Tinto case sent to Chinese prosecutors

Rio Tinto supplies vast quantities of iron ore to China

China has told the Australian government its inquiry into four Rio Tinto executives accused of industrial espionage is now with prosecutors.

A prosecutor in Shanghai will decide whether the case will now go to trial.

The four, including Stern Hu, who headed Rio Tinto's iron ore business in China, have been held since July.

The four executives had been involved in iron ore negotiations with China. Rio Tinto has said that it did nothing wrong.

Trial decision

"Today they (the Chinese authorities) informed our Shanghai Consulate-General that the investigation phase has concluded," Australia's Department of Foreign Affairs and Trade said in a statement.

It added: "The case is now in the hands of the Shanghai People's Procuratorate (prosecutor) who will decide whether it should be brought to trial."

China's State Secrets Bureau website said Rio Tinto's executives had spied on Chinese steel mills for six years and helped to inflate iron ore prices.

The men had been accused of stealing state secrets. That has been downgraded to charges of illegally obtaining commercial secrets and bribery. The maximum sentence is seven years in prison.

Scrapped deal

Their arrest has created a political and diplomatic problem for Australia's Mandarin-speaking Prime Minister Kevin Rudd, who has made improving relations with Beijing a priority.

China is Australia's biggest trade partner.

A month before the arrests, Rio scrapped a $19.5bn (£12.1bn) deal with China's state-owned Chinalco in favour of a tie-up with rival giant BHP Billiton, which angered some in Beijing.

Sam Walsh, Rio's chief executive in charge of iron ore, said: "It would not be appropriate for the company to comment any further at this point in the case other than to reaffirm our hope that matters proceed in an expeditious and transparent manner."

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