Thread: Rio Tinto 'Spies' - What the F***??

Originally Posted by Bigfella

Not only that, but it has recently established very good relations with the next biggest player - BHP. They have both realized that they can run their operations more economically by co-operating. It will be interesting to see how the other big players react to all this. I suspect that any temptation to take advantage will probably give way to the realization that this sort of thing is a serious threat to everyone. I would love to have been listening in on some of the board-level conversations going on over the last few weeks.

Most people missed this.


China, Europe steelmakers join anti-Rio/BHP chorus
Tue Jun 9, 2009 2:00pm EDT
China, Europe steelmakers join anti-Rio/BHP chorus | Deals | Reuters
By Yuko Inoue and Ben Blanchard

TOKYO/BEIJING (Reuters) - Japanese, Chinese and European steelmakers joined forces to fight a plan by Rio Tinto (RIO.L) and BHP Billiton (BLT.L) to link up iron ore operations, while China called for "a fully open international market."

Steelmakers believe a tie-up between the second- and third-largest producers of the raw material to make steel would further concentrate the industry, which saw prices quadruple from 2004 to 2008.

"A merger of iron ore assets of this type in a world market already dominated by just three suppliers would not be in the interests of the steel industry, European consumers or the European economy," industry body Eurofer said on Tuesday.

Debt-ridden Rio (RIO.AX) ripped up its $19.5 billion deal with China state-owned metals conglomerate Chinalco last week, opting instead to combine its western Australian iron ore operations with those of BHP (BHP.AX) in a 50:50 joint venture.

The two mining heavyweights, which with Brazil's Vale (VALE.N) (VALE5.SA) account for nearly 70 percent of the world's traded iron ore, face tough anti-trust scrutiny, but analysts say the planned venture's shrewd structure could mean they sidestep some concerns.

Rio and BHP are betting that keeping their iron ore marketing operations separate will ease anti-trust concerns.

"What was very smart of Rio and BHP is that they've done it as a joint venture to use their infrastructure and that only marginally increases the tonnes for BHP," said James Wilson, a mining analyst for DJ Carmichael & Co in Perth.

"BHP goes from 150 to 170 million tonnes and Rio actually reduces from about 200 million to 170 million tonnes. Is this really anti-competition? I don't think so, and doubt the European Commission will think so," he said.

The Japan Iron and Steel Federation said it would also fight the venture, echoing a statement by the World Steel Association.

"While it takes the form of a joint production venture, it is in effect an anti-competitive move similar to that of the failed takeover bid by BHP of Rio Tinto," said the Japanese steel body, which includes world No. 2 steelmaker Nippon Steel Corp (5401.T).

"A joint venture agreement like this has a strong momopolistic tint," the China Iron and Steel Association said.

FULLY OPEN MARKET?

China Foreign Ministry spokesman Qin Gang declined to comment on the Rio-BHP link at a regular news briefing, but told reporters: "We hope prices for international mining resources can remain stable. And the international market should be fully open."

China's huge steel sector, the world's biggest consumer of iron ore, is deep in talks with Rio and BHP about iron ore prices for this year.

A new settlement regime for prices may emerge as China persists in holding out for price cuts of 40-50 percent, bigger than those settled with other Asian steelmakers.

South Korea's POSCO (005490.KS), the world's No.4 steelmaker, said on Tuesday it was seeking a deal with BHP Billiton to cut iron ore prices by a third for 2009-2010 supply contracts, matching a deal with Rio.

The dropping of Chinalco's planned investment in Rio, which would have doubled its holding in Rio to about 18 percent, has sent shockwaves through China. The deal had been hailed as a breakthrough for the nation, which has consistently punched far below its weight in overseas acquisitions.

"Its purpose was mutually beneficial and now the unilateral move by Rio Tinto not only disappointed the Chinese company but also caused great reverberations around Chinese industry," Qin said.

A Rio-BHP iron ore venture could benefit Brazil's Vale by reducing the number of companies participating in price talks with steel mills.

(Additional reporting by Jim Regan in SYDNEY and Miyoung Kim in SEOUL; Writing by Mayumi Negishi, Edwina Gibbs and Eric Onstad; Editing by Ian Geoghegan and David Cowell)

You missed the point; the way chna handled the entire affairs has been very poor

They still don't know how to be in the international spotlight

Originally Posted by kualaws

paste an article, it is in chinese,
personally, it answers nearly every question about this affair.
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??????rio????????rio?????????????????????????????? ?????????????????????????????????????????????????? ???????????????????????????????????????????????? rio?????
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????????? rio??????????????????????????????????????????????? ?????????????????????????????????????????????????? ?????????????????????????????????????????????????? ???????????
?????????????????????????????????????????????????? ????????????????????????????rio??????????????????? ???????
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??????????????????????????????????????"??????????? ????????33%?????"??????????????????????????????"?? ?????????????????????????0.1%??????......."??? rio????????
???????33%???40%????????????????????????rio??????? ?????????????????????????????????????????????????? ??????rio???????????????????????????rio??????????? ??
?????????????????????????????????????????????????? ????????????????"??"?????????????????????????????? ????????????????????????????????????????????
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?????????????????????????????????????????????????? ?????????rio?????????????????????????????????????? ?????????????????????????7000????????????????????? ????????????????????????????

anybody here has the interest to translate it?
once again, i think many questions about this topic will be solved by this article.

Originally Posted by kualaws

paste an article, it is in chinese,
personally, it answers nearly every question about this affair.
这话说得太过了。此事压根与政治无关，以我当年在国内的工作经验来看，此事完全是rio自己玩火大了，把自 己玩了进去。
　　　　来澳洲之前，我在国内工作了整整十年，其中半年是在大型国企，两年在外方全资企业。跟不同企业打过 无数次交道，但无论站在国企角度，还是外资角度，行内很有几条重要的规矩就是，第一，尽量不做一锤子买卖， 出尔反尔，哪怕有再大利益诱惑。第二，别过分得罪同行，别把事情做绝，不结仇，给自己留后路。第三，别把任 何合作方当傻子，哪怕你刚刚赚了大便宜，也偷着乐去，别显摆。第四，大面上坚持原则，细节处别耍小聪明.. ....
　　　　举个例子说吧，当时电力行业内有八家大型外资企业有投标资格标，公平竞争。事实上，很多项目在投标 前，一些公司已经有了百分之九十以上拿下来的把握。但作为被邀请参与投标方，我所在的公司还是要去投标，我 们自己叫陪标，做足公平竞争的把戏，而不是去揭发同行违规。为什么呢，因为说不定下次轮到我们的公关部门做 得好，我们有了百分之九十的拿下把握，我们也需要同行来陪标，一起做戏给人看。这就是给自己留后路，虽然这 些做看上去很无聊。
　　　　另外，当我们拿下一个标时，即便公关部门的工作已经做到位。签合同或者合同后，也要做适当的让步。 使得甲方参与人员有立功的表现，以便他们向自己的上头交代。
　　　　还有，一些项目本来只能赚十个点，因为对方不懂行，或者因为是卖方市场，不小心赚了二十甚至四十个 点。你也别得意，开庆功会偷着乐去，在甲方面前别得瑟。让甲方人员，即便他是傻子，回去也能有 条活路。
　　　　还有一条就是，有些项目做亏了，或者赚头小了。既然合同签了，或者已经有了口头协议，就别想着在小 地方再捞回来。那样做第一得罪人，第二会让甲方产生不信任感，损失行业内的名声。
　　　　而纵观rio在这两年的表现，可以说，把这几条商场守则全犯了，并且犯得肆无忌惮。
　　　　可以说，不但是rio，很多澳洲企业在这方面，做得都不如欧美企业。光想着法律许可范围之内合理冲 撞，一次性赚足，从不考虑对方的处境和这样做的长期影响。
　　　　就拿rio和中铝合作为例。rio先答应了中铝的参股，从中铝套现救急，然后又借助澳洲这边办事拖 拉的特点，为自己争取缓冲时间，最后再充分利用政治和法律因素毁约，既保全了自己的独立，又骗取了中铝的资 金，单纯从商家角度而言，玩得非常高明，无懈可击。事后中铝再生气，也只能从道义上谴责，法律 上找不出 rio任何漏洞。
　　　　但是，rio忘记了一点，所有交易都不是一锤子买卖，关键时刻给对方留余地就是给自己 留后路。
　　　　我们来看看 rio毁约之后的表现吧，先是在媒体上大肆宣扬，摆脱了共产主义的魔爪。然后又来了个稀释股权，害得中铝不 得不再追加是十几亿美金的投入，完全一副肆无忌惮嘴脸。令中铝从上到下，包括中国政府部门很多为收购唱赞歌 的，全都被抽了无数个嘴巴，鼻青脸肿。到了这个时候，仇恨已经结得非常大了。中铝如果不做任何反击，其相关 责任人肯定再混不下去。
　　　　我们说，任何企业，国家，组织，都是由人来组成的。把人得罪光了，即便是对方是佛教徒，也难免出现 几个做狮子吼的罗汉。而人一旦发起坏来，办法是无穷的。偏偏rio在树了遍地仇人的情况下，依旧毫无自觉， 甚至变本加厉。
　　　　大伙再来看rio近期的表现。
　　　　通过与中国内地的小钢企达成协议，避开中钢协，满足自己最大利益需求。
　　　　大批向中国港口运矿石，就地囤积，制造需求旺盛假象，逼迫中钢协在谈判中就范。
　　　　这两条还不至于要命，最要命的一点是，把中钢协已经逼到绝路上，放话说，"我们也不坚持百分四十， 但三大巨头必须在33%上有所松动"的前提下，依旧步步紧逼。其实中钢协最近那句话完全可以解读为，"老大 ，算你狠。给我点折扣，让我跟上边有个交代吧，哪怕是0.1%也成，求你了......."， 可是 rio等偏偏装听不见。
　　　　其实，33%也好，40%也罢，中钢协谈判组从中没一点提成可拿。他们只需要rio这边有所松动， 让他们跟上头和国内舆论有个交代。如果连续两年毫无建树，他们这个组织就没存在的必要，多少人的前程和饭碗 就全毁了。但rio不明白啊，一再把人往绝路上逼。既然这样，中钢协和先前被rio得罪的人，也就没路可退 了。
　　　　反击的办法很简单，事实上，在中国目前的商业环境下，超过五十万美元的大项目，如果说没有一点公关 投入，或没有什么买通关键人物套取"标底"这些手段，简直是不可能的。而这些潜在手段虽然存在，政府也懒得 认真去抓，却不意味着它们合法。一旦有人举报，而业内人员又生了同仇敌忾之心，则一抓一个准。
　　　　所以，rio那四个人进去，也就是必然的了。并且证据确凿。
　　　　这里我还可以做一个推测，陆克文政府和rio本身不声不响，准备息事宁人，此事还相对好解决。如果 澳洲媒体和政府都像谭保先生这般上蹿下跳，rio将吃更大的亏。届时，只要经办此事的上海国安把证据如实发 给媒体，无论从公关费用数额和公关手法上来看，都是毫无疑问的行贿和窃密罪。如果换成澳洲的法律，可能罪责 更重。毕竟澳洲这边，对行贿和商业窃密容忍度更小，几乎是零容忍。
　　　　所以澳洲这边的公司如果聪明，就想办法大事化小，小事化无，就按秦刚说的，个案处理。如果非闹到国 家跟国家角度，恐怕rio彻底退出中国市场的日子就为期不远了。由于执法权限问题，中国那边拿这些铁矿石公 司没辄，但对付那些囤积居奇的当地商人，办法有的是。7000万吨铁矿石的囤积数额，足够中国一年不进口。 三大公司联手给中国挖的陷阱，到头来可能完全把自己栽进去。

anybody here has the interest to translate it?
once again, i think many questions about this topic will be solved by this article.

This is a forum post by a guy who launches into a lecture about business conduct. It doesn't give any new information regarding what actually happened in this case.

I will admit to being more than a bit amused by all the fuss. Apparently two companies rationalizing physical facilities in a part of the world where infrastructure cost are high is 'anti-competitive', while a commodity consumer buying 20% of one of its key suppliers is 'good business'. (in the part of the world where these mines are there are it is up to the individual companies to build the vast rail & port facilities required - the sort of costs very few companies ever have to pay elsewhere).


Stikes me that both are good business strategies if you can get away with it and 'anti-competitive' if you want to stop it. China will get to complain about being stopped from acquiring big shares in large foreign companies when foreigners (and foreign governments) can purchase similar holdings in comparable Chinese companies.

Originally Posted by xinhui

Most people missed this.


China, Europe steelmakers join anti-Rio/BHP chorus
Tue Jun 9, 2009 2:00pm EDT
China, Europe steelmakers join anti-Rio/BHP chorus | Deals | Reuters
By Yuko Inoue and Ben Blanchard

TOKYO/BEIJING (Reuters) - Japanese, Chinese and European steelmakers joined forces to fight a plan by Rio Tinto (RIO.L) and BHP Billiton (BLT.L) to link up iron ore operations, while China called for "a fully open international market."

Steelmakers believe a tie-up between the second- and third-largest producers of the raw material to make steel would further concentrate the industry, which saw prices quadruple from 2004 to 2008.

"A merger of iron ore assets of this type in a world market already dominated by just three suppliers would not be in the interests of the steel industry, European consumers or the European economy," industry body Eurofer said on Tuesday.

Debt-ridden Rio (RIO.AX) ripped up its $19.5 billion deal with China state-owned metals conglomerate Chinalco last week, opting instead to combine its western Australian iron ore operations with those of BHP (BHP.AX) in a 50:50 joint venture.

The two mining heavyweights, which with Brazil's Vale (VALE.N) (VALE5.SA) account for nearly 70 percent of the world's traded iron ore, face tough anti-trust scrutiny, but analysts say the planned venture's shrewd structure could mean they sidestep some concerns.

Rio and BHP are betting that keeping their iron ore marketing operations separate will ease anti-trust concerns.

"What was very smart of Rio and BHP is that they've done it as a joint venture to use their infrastructure and that only marginally increases the tonnes for BHP," said James Wilson, a mining analyst for DJ Carmichael & Co in Perth.

"BHP goes from 150 to 170 million tonnes and Rio actually reduces from about 200 million to 170 million tonnes. Is this really anti-competition? I don't think so, and doubt the European Commission will think so," he said.

The Japan Iron and Steel Federation said it would also fight the venture, echoing a statement by the World Steel Association.

"While it takes the form of a joint production venture, it is in effect an anti-competitive move similar to that of the failed takeover bid by BHP of Rio Tinto," said the Japanese steel body, which includes world No. 2 steelmaker Nippon Steel Corp (5401.T).

"A joint venture agreement like this has a strong momopolistic tint," the China Iron and Steel Association said.

FULLY OPEN MARKET?

China Foreign Ministry spokesman Qin Gang declined to comment on the Rio-BHP link at a regular news briefing, but told reporters: "We hope prices for international mining resources can remain stable. And the international market should be fully open."

China's huge steel sector, the world's biggest consumer of iron ore, is deep in talks with Rio and BHP about iron ore prices for this year.

A new settlement regime for prices may emerge as China persists in holding out for price cuts of 40-50 percent, bigger than those settled with other Asian steelmakers.

South Korea's POSCO (005490.KS), the world's No.4 steelmaker, said on Tuesday it was seeking a deal with BHP Billiton to cut iron ore prices by a third for 2009-2010 supply contracts, matching a deal with Rio.

The dropping of Chinalco's planned investment in Rio, which would have doubled its holding in Rio to about 18 percent, has sent shockwaves through China. The deal had been hailed as a breakthrough for the nation, which has consistently punched far below its weight in overseas acquisitions.

"Its purpose was mutually beneficial and now the unilateral move by Rio Tinto not only disappointed the Chinese company but also caused great reverberations around Chinese industry," Qin said.

A Rio-BHP iron ore venture could benefit Brazil's Vale by reducing the number of companies participating in price talks with steel mills.

(Additional reporting by Jim Regan in SYDNEY and Miyoung Kim in SEOUL; Writing by Mayumi Negishi, Edwina Gibbs and Eric Onstad; Editing by Ian Geoghegan and David Cowell)

BF, I also believe the whole affair is very silly.


But after all that, there is the market. But I am horrified to read this statement "But the double-digit growth in coal output is unlikely to sustain, as Shanxi's eligible small mines have nearly all been restarted, Zhan said."
meaning more miners will lose their lives working in those small and unsafe mines..


UPDATE 2-China iron ore output soars, steel at record | Markets | Markets News | Reuters


UPDATE 2-China iron ore output soars, steel at record | Markets | Markets News | Reuters
UPDATE 2-China iron ore output soars, steel at record
Fri Jul 17, 2009 3:55am EDT

* Iron ore output leapt 27 pct in June from May

* Record steel output, 20 pct above 2008 average

* Coal production up 12.3 pct on May (Adds details, comments, writes through)

By Alfred Cang and Tom Miles

SHANGHAI/BEIJING, July 17 (Reuters) - China's monthly iron ore output leapt by a quarter to the second highest ever in June as demand for steel strengthened and prices rose, while steel production hit an all-time peak, official data showed on Friday.

The 27 percent jump in iron ore output, to 83.3 million tonnes, will reassure local steel mills that are facing uncertainty over imports of iron ore because of the furore over allegations of spying levelled at Rio Tinto (RIO.AX: Quote, Profile, Research, Stock Buzz) employees involved in China's annual price negotiations.

China was expected to settle iron ore prices with Rio and its Anglo-Australian rival BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz) at the end of last month, but the two sides failed to strike a deal before the talks became subsumed in the spying row involving Rio.

With a revival in the international market, domestic production has rebounded.

"The trend is expected, as imported iron ore prices have been higher than domestically produced, encouraging local miners to resume production," said analyst Hu Kai at industry consultancy Umetal Research Institute. "Production will keep rising in July, as more mines are reopening."

A slump in prices early this year forced China's relatively high-cost iron ore mines to cede domestic market share to importers, who have shipped unprecedented amounts to China for the last three months.

Some analysts had estimated China closed nearly 20 percent of its ore mines this year.

But spot iron ore prices delivered in China have steadily risen to above $80 a tonne and some Indian ores are offered at around $90 a tonne, making them more expensive than Chinese spot material for the first time nearly in a year.

China, the world's largest iron ore buyer, consumes more than half of the world's traded ore. Its buying spread helped iron ore prices rebound strongly this year, reducing their negotiation leverage with global miners.

The National Bureau of Statistics, which published the figures, revised last June's iron ore production up, leaving the latest month showing a 1.6 percent fall in volumes.

China's crude steel output in June rose 6 percent on year to 49.42 million tonnes, and coal output jumped 15.9 percent on year to 279.09 million tonnes, both record high levels, according to the data from the National Bureau of Statistics.

June's steel production is equivalent to an annual output of more than 600 million tonnes, 20 percent higher than the country's 2008 production and way above previous government target of 460 million tonnes for 2009.

"The production means the utilisation rate of Chinese steel sector has returned to more than 90 percent, similar to the level in 2007, due to strong order booking," said Hong Kong-based analyst Helen Lau with OSK Securities.

Lau estimated that China's total annual crude steel capacity had reached 650 million tonnes.

China's June raw coal output rose 12.3 percent from a month earlier, the official data showed.

"Small coal mines in Shanxi were returning to production, in addition to fast growth in coal production in Inner Mongolia and Shaanxi," said Zhan Lingyan, an analyst at Shenyin & Wanguo Securities.

Inner Mongolia and Shaanxi were China's No.2 and No.3 coal producing region by output in 2008, after Shanxi Province.

But the double-digit growth in coal output is unlikely to sustain, as Shanxi's eligible small mines have nearly all been restarted, Zhan said.

"Coal mines in Inner Mongolia may not have as strong incentive to produce after the regional government introduced a coal price fund in July," she said.

The coal price fund requires coal miners to pay into it on basis of their output.

China's coal market is likely to be in balance, or even gain a small surplus in the summer, analysts said. (Reporting by Rujun Shen, Alfred Cang and Jacqueline Wong; Editing by Clarence Fernandez)

This whole affair has reached the very top for both nation, it is crazy.



Hu Case Will Be Resolved by Government, Herschel Says (Update1)
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By Rebecca Keenan

July 20 (Bloomberg) -- China’s case against Stern Hu, an Australian Rio Tinto Group executive detained for allegedly stealing state secrets, will be resolved by the two governments, said Herschel Asset Management Ltd.

“It will be sorted out by the government at a fairly high political level,” said Herschel’s Saxon Nicholls, who helps manage A$544 million ($439 million), including Rio Tinto shares. “You have a high degree of mutual dependence, which would suggest it will get sorted out at a government level.”

Hu and three other Rio iron ore executives were detained in China on July 5, straining relations between the Asian nation and Australia, the biggest supplier of the ore. The case relates to a criminal probe into ore price talks, not espionage, and may result in a decision to charge the mining executive, Australia’s Foreign Minister Stephen Smith said yesterday.

Foreign ministry spokesman Qin Gang had said on July 9 that Hu was suspected of “stealing Chinese state secrets for foreign countries.” China has also accused Hu of bribing steel mill officials during the iron-ore negotiations, Smith said on July 10, citing a statement from Shanghai’s Security Bureau.

Rio, the world’s third-largest miner, has denied the allegations against Hu, who manages the London-based company’s iron-ore business in China, and the three other employees, who are Chinese nationals. China is the world’s largest buyer of the ore.

Rio gained 2.3 percent to A$53.71 at 11:57 a.m. Sydney time on the Australian stock exchange.

-- With assistance from Momoe Ikeda-Chelminska in Tokyo and Bernard Lo in Hong Kong. Editors: Keith Gosman, Tan Hwee Ann

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net
Last Updated: July 19, 2009 22:05 EDT

Hu Case Will Be Resolved by Government, Herschel Says (Update1) - Bloomberg.com

The Chinese authorities are now treating these cases as bribery, not as esponage.

Rio espionage angle out

20 July [SMH] CHINESE investigators who have detained Rio Tinto executive Stern Hu are "not interested in what we would regard as espionage", Foreign Minister Stephen Smith said yesterday.

Mr Smith said Vice-Foreign Minister He Yafei had conveyed to him on Friday that Chinese authorities were confining their investigation to this year's iron ore negotiations and that the "criminal" probe would not threaten the broader relationship.

"Vice-Minister He made it clear that the Chinese are regarding this matter as an individual matter," Mr Smith told the ABC's Insiders program yesterday.

"It's quite clear they are focusing on a criminal or a judicial investigation relating to the 2009 iron ore negotiations." he said.

"That is their clear focus; they're not interested in what we would regard as espionage or national security matters," he said ....