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A deeper look into the Rio Tinto saga
A Rio Tinto plant in Perth, Australia
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TEXT OF STORY
Bill Radke: Australian officials plan to meet with a mining executive of the Anglo-Australian mining company Rio Tinto. He's being held by Chinese authorities. China accuses the manager of stealing state secrets relating to talks over iron ore prices. China has not revealed its evidence, but some are wondering whether this has something to do with a deal gone bad between Rio Tinto and a Chinese company. Reporter Tamara Keith has our story.
Tamara Keith: First, some really basic facts. Iron ore is a major ingredient in steel. China makes a lot of steel. Rio Tinto is a heavy hitter in the iron ore business.
And there's been quite a soap opera brewing between Rio Tinto and Chinalco, a Chinese mining company. The two announced a partnership earlier this year, where the state-owned Chinese company would take a significant stake in Rio Tinto. But that didn't go over very well in Australia; last month, the deal fell through.
Dan Ikenson is a trade policy expert at the Cato Institute:
Dan Ikenson: It's what goes on in the business world. Some people take it personally. Some businesses take it personally. And I know the Chinese have taken this issue as a matter of national pride.
Chinese officials say the dead deal has nothing to do with the detention of the Rio Tinto employees. Right now, there are also heated negotiations to set iron ore prices for the coming year. And Ikenson says detaining employees is probably not the best way to breed good will.
I'm Tamara Keith for Marketplace.
Maybe China learned some tricks from the western countries - how many times have we heard about hearsay espionage cases against China? And western countries played their sleazy balls to defend their national interest? Yes business is business, but it should not be winner takes all. Sometimes it backfires when you push too much. In this case I think Australia and Rio Tinto pushed too much.
http://seekingalpha.com/instablog/183929-sober-realist/13592-rio-tinto-e...
Business practices that uses industrial espionage by the means of corruption isn't tolerated in Western democracies. So it is a shame they caught them doing the corruption before we caught them.
"State secrets"? Sure since Chinalco is a state company and any industrial secrets from a state company technically is "state secret".
I'm sorry. Steel industry? State secrets? Give me a break. Steel is a comodity. Making it is not rocket science for Pete's sake. My guess is that Peking will smack some heads around over in the thin skinned Chinalco executive suite and get this mess straightened out. It's business fellas. It's a game. You dont put your adversary in jail because he is playing hardball. You outsmart him. Sheesh.
