Chinese prosecutors to rule on fate of 'Rio Four'

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Chinese police have concluded investigations into four employees of the Australian mining giant Rio Tinto, who were arrested last year on suspicion of bribery and corporate espionage.

Officals said yesterday that the case against Stern Hu, the Australian head of Rio Tinto's Shanghai office, and three Chinese colleagues from the company's iron ore business – Liu Caikui, Ge Minqiang and Wang Yong – had been referred to prosecutors. The accused have been detained since July.

With the preliminary investigation by the Chinese Public Security Bureau now complete, the case has been sent to the People's Procuratorate for a decision on whether the matter will go to trial. Under Chinese law, prosecutors have at least five more months to consider the charges.

The affair is politically sensitive and threatens to harm relations between China and Australia. China's hungry steel industry makes it the world's biggest importer of iron ore, while Rio Tinto is one of the biggest suppliers of the mineral. Although the Rio staff were not formally arrested until August, their detention came just weeks after the breakdown of negotiations in the annual price review of iron ore imports.

It also followed the collapse of a $19.5bn (£12bn) deal under which China's state-owned aluminium giant Chinalco would have taken a major equity stake in debt-laden Rio Tinto and some of its key assets.

The proximity of the two events fuelled speculation that the arrests could be politically motivated. Sam Walsh, the chief executive of Rio's iron ore division, said yesterday: "This transfer is the next stage in a continuing legal process under Chinese law. It would not be appropriate for the company to comment any further at this point in the case, other than to reaffirm our hope that matters proceed in an expeditious and transparent manner."