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China cites 'conclusive evidence' in Rio Tinto case

  • Story Highlights
  • Chinese government: Australian employee of Rio Tinto "stole state secrets"
  • Australian opposition leader Malcolm Turnbull: Situation is "unacceptable"
  • The employee, and three Chinese co-workers, held since Sunday
  • Incident follows soured deal between Rio Tinto and Chinese-owned Chinalco
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BEIJING, China (CNN -- China has "conclusive evidence" that four employees of the world's second-largest mining company were stealing Chinese state secrets, the country's foreign ministry said.

Australia's Foreign Minister Stephen Smith expressed his surprise at China's actions.

File photo of Chinese Premier Wen Jiabao on a 2006 tour of a Rio Tinto plant in Western Australia.

Four employees of Rio Tinto -- one Australian and three Chinese -- have been arrested on suspicion of espionage and stealing state secrets. Australian Stern Hu is the general manager of Rio Tinto's Shanghai office, where all the employees work.

"As understood from the Shanghai State Security Bureau, during China's iron ore negotiation with foreign miners in 2009, Stern Hu gathered and stole state secrets from China via illegal means, including bribing internal staff of Chinese steel companies," a government Web site said Thursday.

"Relevant Chinese departments took action against him according to law on the strength of conclusive evidence that he stole China's state secrets on behalf of overseas interests, thereby seriously damaging China's economic interests and economic security," said Chinese Foreign Ministry spokesman Qin Gang, who added that China would handle the spy case "according to the law."

China's reasons for holding Hu "came as a surprise," said Stephen Smith, Australia's foreign minister. Video Watch more on the case »

"The Chinese state and the Chinese authorities take a much broader view of what state secrets or national security might be than, for example, Australia or other nations might," Smith said at a Friday news conference in Perth, Australia.

Though the case is worrisome, Smith said, he didn't see wider implications for other companies or individuals doing business in China.

Australian opposition leader Malcolm Turnbull called the situation "unacceptable."

"We've raised our concerns with the Chinese Embassy in Canberra," he said Thursday. "This is a matter of very real concern."

A Rio Tinto spokesman also called the charges surprising.

"We are not aware of any evidence that would support such an investigation," spokesman Nick Cobban told CNN. "We will continue to work to support our employees and their families."

The incident comes after Rio Tinto broke away from a $19.2 billion investment deal with state-owned Chinalco last month.

The deal with Chinalco was signed in February and was awaiting a review by Australia's Foreign Investment Review Board.

The deal soured as opposition party members ratcheted disapproval, saying it would put Australian resources at strategic risk. Others saw the deal as an alliance that would further link resource-rich Australia with the commodities-hungry Chinese market.

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Smith brushed aside speculation that the detentions were linked to the deal.

"I've seen no evidence and I have no basis for any such speculation," he said Thursday. "But I do underline that, when our officials were advised of the reasons for the detention, that came as a surprise to us, as it came as a surprise to Rio Tinto, Mr. Hu's employer."

CNN's Kevin Voigt, Roya Shadravan and Emily Chang in Hong Kong, China, and Kendra Petersen in London, England, contributed to this report.

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