A big African deal signals a partial thaw in Rio Tinto's relations with China
IN ONE respect Rio Tinto’s relationship with China is clear. That country accounted for a quarter of the mining giant’s revenues in 2009, mainly because of China’s voracious appetite for iron ore. In other respects their relationship is harder to fathom. China was said to be furious last year when Rio first accepted and then spurned its offer to make a $19.5 billion investment in the Anglo-Australian firm. Four Rio employees were subsequently arrested in China for alleged bribery and commercial spying, and this week a date was set for their trial. But on March 19th, just three days before the courts were to begin hearing the cases, Rio announced it had signed a huge joint venture in Africa with none other than Chinalco, the Chinese state-backed metals firm which it had wooed and then jilted last year.
If the deal, to develop a huge iron-ore mine at Simandou in Guinea, suggests a warming in relations between Rio and the Chinese authorities, the signals from the continuing judicial proceedings against Rio’s four employees imply quite the opposite. The arrests of the four men—three are Chinese and one, Stern Hu, is an Australian of Chinese descent—were related to the annual negotiations that set the price China’s steelmakers must pay for iron ore from the world’s three big suppliers: Rio, BHP Billiton and Vale. It was widely assumed outside China that the arrests were motivated by the Chinese authorities’ pique at the way Rio had treated Chinalco. ...
