|2/11 Australian Mining - The president of Chinese aluminium giant Chinalco
has stepped down before the expected completion of a multi-billion dollar
deal with Rio Tinto. Xiao Yaqings resignation comes the day after Rio
Tintos chairman designate Jim Leng unexpectedly resigned. Industry
speculation has suggested that Leng resigned amid disagreements over the
way Rio proposes to reduce its US$38.9 billion in debt.
2/12 Reuters Chinese state-owned aluminum group Chinalco will invest $19.5
billion in miner Rio Tinto in a deal that will secure resource supplies for
China and help cut Rio's heavy debt but also raise regulatory scrutiny.
3/18 Domain B - The Australian government would never be allowed to buy a
mine in China. So why would we allow the Chinese government to buy and control
a key strategic asset in our country. Stop the Rudd government from selling
Australia," senator Barnaby Joyce said in Canberra.
6/1 AFP - Australian opponents of Chinalco's link-up with mining giant Rio
Tinto used images of the Tiananmen Square crackdown in a television advertisement
calling on Canberra to block the deal
6/4 Guardian - One of the most controversial deals ever proposed in the mining
sector was buried today as Rio Tinto walked away from a closer financial
tie-up with China...... China's state-owned metals group, Chinalco, was to
have spent $19.5bn (£12bn) raising its stake in Rio to 18% but the proposal
faced ferocious opposition both from some shareholders and regulators in
Australia, where Rio has extensive mining operations. Tom Albanese, the Rio
chief executive, is now focusing on a $12bn rights issue and a possible side
deal on iron ore with arch-rival BHP Billiton.
6/5 Asia One - "State-owned Chinese aluminium producer Chinalco said Friday
it was "very disappointed" after mining giant Rio Tinto cancelled a US$19.5
billion tie-up. "We are very disappointed at this outcome," Chinalco president
Xiong Weiping said in a statement on the company website. "We had maintained
an extremely flexible and constructive attitude in our consultations with
6/7 Xinhua - "Rio Tinto is like a dishonourable woman: once she loved the
money in Chinalco's pocket but she actually did not love the man himself.
Now she is breaking faith and kicking down the ladder."
6/12 Reuters - China's crude steel production rose 7 percent to near record
highs seen in June last year, undermining efforts of the world's largest
steelmaker to win a deeper iron ore price cut and rein in rampant output
growth. Data showed on Friday China's crude steel output climbed 7 percent
in May from the previous month to 46.46 million tonnes, just shy of a record
46.9 million tonnes it produced in June last year before cutting back output
sharply because of a spreading global financial crisis.
6/18 Site Comment - It appears that China is fighting back against the Rio
Tinto snub, and may be secretly negotiating behind Rio and BHP's back with
iron ore producers, Vale and Fortescue. This could get very ugly before its
all over with, as China is threatening to block the union as monopolistic.
China is also threatening to slow production of steel if the iron ore producers
will not accept their 40% decline in price terms, but we feel this threat
is based more on seasonal demand, than anything.
6/19 Bloomberg - The China Iron & Steel Association will ask steelmakers
to agree on a purchasing price for spot iron ore to avoid a bidding war,
should long-term contract talks fail with the worlds largest suppliers.
6/19 CMA - China Mining Association announced its offices in Australia, South
Africa, and Canada has been withdrawn on June 19, 2009. No activities are
allowed by any office on behalf of China Mining Association offices, effective
on June 19, 2009.
6/20 China Daily - The Southern Metropolis Daily reported on Friday that
a number of steel enterprises in the province had already jointly negotiated
supply deals with overseas miners, citing Zhu Fengliang, secretary general
of the Shanxi Iron and Steel Association.
6/23 Sinocast - China Iron & Steel Association, the industrial organization
of Chinese steel makers, is very angry with the iron ore traders who secretly
inked imports contracts with foreign iron ore suppliers and stored up iron
ore to abnormally stir up the domestic prices.
6/24 Reuters - "I don't see Rio giving in as they can sell on spot for a
better price. Why would you? And while the Chinese can wave their arms all
they want, the fact is the (spot) price is going up," said James Wilson,
a mining analyst for DJ Carmichael & Co.
6/29 Reuters - Within 48 hours, Shan Shanghua, the combative voice of the
China Iron and Steel Association, needs to broker a face-saving deal with
global miners, preserving China's national pride, or risk almost single-handedly
triggering the collapse of a decades-old pricing system, forcing steel mills
to buy their raw material on the spot market. "He is a hardliner in the talks
and always faithful to the industry and to the government," said an adviser
to the Chinese negotiating team..... It was CISA that turned iron ore talks
into a question of national pride after Japanese mills agreed to an unprecedented
rise of 71.5 percent in 2005. CISA argued vociferously in the Chinese press
that it was the Chinese industry's right, as the world's largest steel industry,
to be the first to settle on the deal which is then traditionally accepted
by all other mills.
6/29 Fairfax - If no agreement is reached, from Wednesday some contracts
can be dissolved, leaving spot prices as a likely option to determine future
prices. If negotiations extend beyond June 30, the introduction of a spot
price system could play into the hands of global miner BHP Billiton, which
has indicated it would prefer using the spot price, or an index price rather
than setting annual benchmarks. Rio Tinto, the world's second-largest iron
ore miner, has said it would prefer to maintain a benchmark price to give
confidence to supply and price. .... Such a move would not affect large Japanese
and South Korean steel firms that had already signed agreements for a benchmark
price about 33 per cent lower than last year. Chinese firms have been holding
out for a better deal, wanting iron ore contract prices to fall by about
40 to 45 per cent to reflect a drop in spot iron ore prices.
6/30 The Age - The benchmark pricing system that has governed the global
iron ore trade for 40 years is likely to unravel at midnight tonight, with
insiders saying Australian miners and Chinese steel makers are far from sealing
a late deal. It is believed that China's lead negotiators, the Chinese Iron
& Steel Association and Baosteel, have scheduled no negotiations today,
despite a large proportion of long-term contracts due to expire.
7/1 The Australian - Rio Tinto last night threatened to shift iron ore volumes
under contract to China onto spot markets, raising the stakes as annual price
negotiations spill into July for the first time. Unless an deal was reached
overnight with the China Iron and Steel Association, Rio was understood to
be ready to use "drop-dead" clauses that allowed volumes in many contracts
to be terminated if prices were not agreed to by June 30.
7/6 Reuters - "We're selling everything we make -- we've never been as busy,"
said Rio Tinto Iron Ore spokesman Gervase Greene. Greene said Rio Tinto was
selling iron ore to Chinese mills at spot prices after failing to agree annual
contact prices. "Instead of buying under contract, they just chose to buy
at whatever the prevailing rate is on the day," he said. "At the moment that's
about $82 so we're selling it at a higher price than if they had agreed (to
the 33 percent cut) so that's where it's at."
7/9 China Daily - Four employees of global mining giant Rio Tinto in Shanghai
have been detained, apparently on suspicion of espionage and stealing state
secrets. Shanghai's State Security Bureau yesterday confirmed to China Daily
that the four were being investigated by the bureau. The bureau would not
give a reason why they had been detained. Three of the four being detained
since July 5 are Chinese citizens. The fourth is an Australian named Stern
Hu, general manager for China operations at Rio Tinto's iron ore division
7/11 Courier Mail - Yesterday, Foreign Affairs Minister Stephen Smith quoted
from an official Chinese Government website, which said Mr Hu was accused
of gathering and stealing "state secrets from China via illegal means, including
bribing internal staff of Chinese steel companies" during iron ore price
7/14 China Daily - Detailed information of Chinese steel mills was found
in computers of Rio Tinto's Shanghai office, local media reported Monday.
Four employees of Australian iron ore supplier Rio Tinto were detained in
Shanghai on July 5 on charges of espionage. An insider said that Rio knew
almost every detail of some Chinese steel companies, all of which signed
long term sales contracts with Rio. Information in Rio's computers includes
the outputs, sales, purchasing plans, raw material stocks and schedules of
production. "Even presidents of these companies may not have such detailed
information," the insider said.
7/14 AP - The chief iron ore negotiator for Baosteel Group, China's biggest
steel producer, was questioned but allowed to return to work, the newspaper
21st Century Business Herald said. It gave no indication whether he was suspected
of wrongdoing. Executives of Anshan Iron & Steel Group, Laigang Group
and Jigang Group also are under investigation, the China Daily newspaper
reported. It gave no other details. An executive who oversees iron ore purchases
for major steelmaker Shougang Group was detained last week, according to
7/14 NY Times - Desperate for iron ore, many small mills bribed industry
officials to get those supplies, experts say. There are 112 enterprises
that are qualified importers, said Xu Zhongbo, a professor at the Beijing
University of Science and Technology and an industry expert. But China
has thousands of small mills, all of them waiting to get iron ore. So that
gives big steel makers a great chance to arbitrage.
7/15 China Daily - Executives from all 16 Chinese steel mills participating
in iron ore price talks this year have been bribed by Rio Tinto employees,
an industry insider claimed Tuesday, amid reports that the government is
considering invalidating 20 iron ore import licenses to regulate the chaotic
ore import business. The startling claim comes amid a widening probe of alleged
business espionage linked to the world's second-largest iron ore miner, Rio
Tinto...... ""And then Rio Tinto bribed them (to get access to industry data),
which has become an unwritten industry practice," the source said. "If companies
didn't accept, they would have cut supplies and so the whole steel industry
has been bribed. ..... Another industry insider, who also requested to be
unnamed, told China Daily: "There are about 1,200 steel mills in China. Most
small- and medium-sized mills without import licenses have to buy ore from
big ones with licenses. "Therefore, some big mills don't care about the ore
prices because they could transfer the increasing cost to small- and medium-sized
ones. Meanwhile, those small- and medium-sized steel mills are forced to
sign contracts with global miners privately.
7/16 Canadian Press - Mining giant Rio Tinto Ltd. has pulled researchers
who follow China's steel industry out of the country after four employees
were detained on spying allegations during iron ore price talks, news reports
said Thursday .... The Herald, citing an unidentified member of China's
negotiating team, said the Chinese have switched to talking with Brazil's
Vale about prices because "there is no one at Rio that we can talk to."
7/17 Bloomberg - Rio Tinto believes that the allegations in recent
media reports that employees were involved in bribery of officials at Chinese
steel mills are wholly without foundation, Sam Walsh, head of Rio
Tintos iron ore unit, said in an e-mailed statement today. Employees
acted at all times with integrity and in accordance with Rio Tintos
strict and publicly stated code of ethical behavior, he said.
7/21 NY Times - "To the likely consternation of diplomats in both Beijing
and faraway Windhoek, a newly minted initiative by Namibias government
to root out official corruption has snared an early catch: three people who,
Namibian prosecutors charge, helped win a lucrative contract for a Chinese
company recently headed by the son of Hu Jintao, Chinas president.
The charges against the three, including one Chinese national, have yet to
be heard in court. There is no public evidence that President Hus
38-year-old son, Hu Haifeng, or other high officials of the company, Nuctech
Company Limited, knew of the Namibian dealings. But mere reports of the charges
have already prompted Chinese government censors to block Internet surfers
from searching for news about the younger Mr. Hu, Namibia or Nuctech, according
to the California-based Internet site China Digital Times."
7/22 AP - "China on Tuesday denied links to a Chinese-born engineer who was
convicted in the U.S. last week of stealing trade secrets for China during
his 30-year career at Boeing and Rockwell International. .... Chung, 73,
could face up to 90 years in prison at his sentencing, scheduled for November.
His defense attorney said he planned to appeal. The case was the first conviction
on economic espionage in the U.S. The law was passed in 1996 to help the
government crack down on the theft of information from private companies
that contract with the government to develop U.S. space and military
technologies. The legislation became a priority in the mid-1990s when the
U.S. realized China and other countries were targeting private businesses
as part of their spy strategy."