China detains Rio Tinto's executive for espionage

Stern Hu, general manger of Rio Tinto's iron ore business in China, an Australian citizen, and three other Chinese employees, have been detained by the Chinese government on suspicion of espionage and stealing state secrets since Sunday. The giant Australian-British mining company released a statement on Wednesday, saying it's not aware of "any evidence that would support such investigation."

Rio's Shanghai office declined to comment, but Beijing-based Anthony Loo, head of Rio Tinto China was reportedly in Shanghai yesterday for an emergency meeting on the issue, reported Shanghai Daily.

Chinese local paper reported bribery could be involved as Rio's Chinese clients are being investigated too.

There are rumors in the air saying the incident was partly because Rio turned down the US$19.5 billion investment from Aluminum Corp of China (Chinalco), a state-owned company in June.

Chinalco denied it, saying the detention has nothing to do with the deal.

Chinalco's investment, which could have raised its stake in Rio to 18.5 percent from the current 9.3 percent triggered furious opposition in Australia due to the worries about China's rising regional power as well as the possibility of weakening the mineral riches' priorities.