China accuses Rio of spying for six years; Australia unimpressed

China is slowly tightening the noose around Rio Tinto in the commercial spying case, when its state secrets watchdog said that the miner's ''six years of spying'' on its steelmakers has resulted in China losing $102 billion through excess payments for iron ore.

An article published by China's National Administration for the Protection of State Secrets-affiliated website on Saturday says that the seizure of Rio Tinto's computers from its Shanghai office has revealed the massive damage done to China's economic security and interests.

The state secrets watchdog said in the scathing article that the Anglo-Australian miner had in effect blackmailed Chinese steel companies to pay inflated prices for iron ore over the past six years through snooping out intelligence, getting information by deceit and bribing officials, resulting in Chinese steelmakers paying an excess of over 700 billion yuan ($102 billion).

In the beginning of July, China had arrested Rio Tinto's Shanghai office marketing manager Stern Hu, an Australian passport holder of Chinese origin and the mining giant's chief negotiator in the annual contract price for iron ore, and three other local employees of Rio, on charges of espionage and stealing state secrets. (See: China arrests four Rio Tinto employees)

China later dropped charges of espionage and said that it was conducting an investigation related to bribery charges only.

Although the Chinese have not bought any formal charges, the four Rio Tinto executives are accused of bribing officials at 16 Chinese steel companies and stealing state secrets related to the ongoing long-term iron ore settlement talks, which violated Chinese law as well as international business morality.