Now, Oz mining giant Rio Tinto accused of bribing executives of 16 Chinese steel mills

Posted By: Staff
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Beijing, July 15 (ANI): The staff of Australian miner Rio Tinto bribed executives from all 16 Chinese steel mills participating in this year's iron ore price talks, an industry insider has disclosed.

"Rio Tinto got to know the key executives of the 16 steel mills, who have sensitive industry information, when the China Iron and Steel Association (CISA) brought them to the bargaining table," China Daily quoted a senior manager at a large steel company, as saying.

"And then Rio Tinto bribed them (to get access to industry data), which has become an unwritten industry practice. If companies didn't accept, they would have cut supplies and so the whole steel industry has been bribed," he added.

The shocking revelation comes amid reports that the Chinese Government is planning to cancel 20 iron ore import licenses to regulate the chaotic ore import business, and investigate an alleged business espionage linked to the world's second-largest iron ore miner, Rio Tinto.

"It is very likely for CISA to cancel about 20 iron ore import licenses held by steel makers and trading companies, with a focus on trading companies," a source said.

Executives from five leading domestic steel makers and officials from the industry association are under investigation following last week's detention of four employees of Rio Tinto's China operation, including Australian-origin Stern Hu.

Another industry insider said: "There are about 1,200 steel mills in China. Most small- and medium-sized mills without import licenses have to buy ore from big ones with licenses.

"Therefore, some big mills don't care about the ore prices because they could transfer the increasing cost to small- and medium-sized ones. Meanwhile, those small- and medium-sized steel mills are forced to sign contracts with global miners privately," he added.

And, Hu Kai, an analyst with Umetal, a steel consulting firm, said: "Because of their own interest and intense competition among various steel makers in China, it's unlikely for them to present a united front when bargaining with overseas ore providers." (ANI)

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