Stern Hu trial begins in Shanghai

Monday, 22 March, 2010 - 11:42

Rio Tinto chief Tom Albanese has been mending fences in China as at least two of the global miner's employees were preparing to plead guilty to taking bribes.

Australian man Stern Hu and three other Rio Tinto employees went on trial in Shanghai on Monday accused of bribery and stealing trade secrets.

In Beijing as the trial began, Mr Albanese said Rio Tinto was working hard to resolve difficulties with China.

"I can only say we respectfully await the outcome of the Chinese legal process," Mr Albanese told the China Development Forum on Monday before news of Hu's impending plea was reported on Monday.

According to Dow Jones Newswires reports, Hu and a Chinese fellow employee of Rio Tinto were planning to plead guilty to bribe-taking.

The news agency quoted lawyer Tao Wuping as saying Hu had been charged with accepting six million yuan ($961,800), while fellow defendant Liu Caikui faced charges of taking three million yuan.

Both would plead guilty to accepting bribes while contesting the amounts involved, said Tao, who represents Liu.

Mr Tao added prosecutors also charged the other two Chinese defendants, Ge Minqiang and Wang Yong, with accepting bribes but that they had not decided on their pleas, the report said.

The arrest and trial of the four employees has tested ties between Australia and China and worried companies about doing business in China.

Prime Minister Kevin Rudd said on Monday the Australian government would be monitoring the trial very carefully.

"China has a different legal system to Australia. China has a different legal system to the rest of the world," Mr Rudd told reporters.

"The world will be watching very closely how the trial is handled."

In Sydney, the head of a delegation of Deputies to the National People's Congress from Tibet of the People's Republic of China, Xiangba Pingcuo, said the trial would be fair.

"As to the case from the Rio Tinto, it is a pure economic issue or question," Mr Pingcuo said through an interpreter on Monday at a press conference at China's Consulate General in Sydney.

"And I could assure you that our government, our judicial relevant authorities, have practised a very serious manner in this case, taking full consideration of the China-Australia relationship.

"And I'm sure that it will come to a very good conclusion and a good result based on our legal system."

Meanwhile, Mr Albanese reminded the forum in China of his company's "longstanding partnership" with China, which went back 50 years.

"Most of this time we have enjoyed a strong relationship with China," Mr Albanese said.

"Only in the last year have we come upon some difficulties, which we are working hard to resolve."

Bell Potter Securities client adviser Chris Kimber said it was very positive to see Mr Albanese speaking directly to a Chinese forum.

"He is doing the right thing, and what he should have done in the first place," Mr Kimber said.

"They (the Chinese government) are a nine per cent shareholder and someone who can write a cheque for whatever they (Rio Tinto) want to do," he said.

Mr Albanese reminded his Beijing audience his company provided the iron ore, copper, aluminium that helped to build China.

"A positive relationship with this market is vital to the continued success of our company."

Mr Albanese also lauded Rio Tinto's new partnership with China's state-owned Aluminum Corporation of China (Chinalco) to develop the massive Simandou iron ore project in West Africa.

Last year relationships were strained after Rio Tinto walked away from a proposed $US19.5 billion ($A21.3 billion) investment by Chinalco and failed to agree on a benchmark iron ore price with the Asian nation's steel mills.

One of the perceived benefits of the failed tie-up with Chinalco was to have been better access for Rio Tinto to conduct exploration work in China.

Mr Albanese today appealed for his company to be able to conduct this work.

"I recognise China has considerable expertise in this area and that a lot of exploration work is being undertaken in China and that new resources are being discovered here," Mr Albanese said, according to speech notes.

"That said, however, I do believe that our long experience in exploring for and finding mineral resources around the world could usefully be brought to bear to supplement China's own efforts."

Mr Albanese also said to develop its overseas brand China should reflect on the global impact of its activities.

"Resources extraction involves not only capital and technology," Mr Albanese said.

"It also requires a focus on sustainable development, which means earning the consent of the local people or the `licence to operate'," he said.

Shares in Rio Tinto ended the day down $1.16, or 1.52 per cent, at $75.03.