Q&A: China detains Rio Tinto execs for spying

By Lucy Hornby

BEIJING (Reuters) - Four Shanghai-based employees of global mining firm Rio Tinto were criminally detained this week on charges of stealing state secrets.

The case has rattled the Australian dollar, and points to the risks for foreigners of doing business in China, a country run by a single party with no independent judiciary.

WHAT HAPPENED?

Stern Hu, Rio's head of iron ore marketing in China, and three other members of the iron ore team were detained over the weekend for "stealing state secrets."

An iron ore executive from China's eighth-largest mill, Shougang, was also taken into custody, Chinese media reported. Iron ore executives from other large Chinese mills are also rumored to be in custody.

The arrests came as a Shanghai paper reported Chinese steel mills had given in on annual iron ore prices, agreeing to the same 33 percent cut other Asian steelmakers set earlier.

That capitulation would be a loss of face for the state-backed Chinese Iron and Steel Association, which had vowed to the central government it could achieve a deeper discount.

However, both Chinese and Rio Tinto officials have denied an agreement was reached.