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China-Australia LNG deal as Rio Tinto trial ends
The latest deal suggests that Australia and China’s commercial ties have been largely unaffected by tensions over the detention and trial of Australian citizen Stern Hu -- who was head of Rio Tinto’s iron ore business in China -- and three Chinese co-workers on charges of taking bribes and stealing business secrets.
The trial, which began on Monday, wrapped up earlier than expected on Wednesday. The four pleaded guilty to charges of taking bribes, their lawyers said, but their pleas on the commercial espionage charges were unknown as those hearings were cloaked in secrecy. Virtually all cases that go to court in China end in conviction.
The Rio Tinto case is seen by many working in China as evidence the Communist-ruled government is subjecting foreign companies to increasingly close scrutiny, raising their risks of running afoul of secrecy rules that are themselves kept secret. The arrests last August were initially thought linked to Beijing’s anger over high prices it paid for iron ore -- a key commodity in China’s booming economy. Rio Tinto, based in London and Melbourne, is one of the top suppliers of ore to China and a key industry negotiator in price talks with China’s state-owned steel mills.
Verdicts in the case may come within days. That would be relatively quick by Chinese standards, with waits of weeks or months not unusual.
The gas contract signed in Beijing, meanwhile, calls for China’s offshore oil and gas company CNOOC to buy 3.6 million tons of liquefied natural gas a year for 20 years from an Australian energy project operated by BG Group PLC.
It is Australia’s biggest single company-to-company contract ever, Australia’s Resources and Energy Minister Martin Ferguson said Wednesday after witnessing the signing. A figure for the deal wasn’t released but Australian media reports estimated its value at Australian dollars 80 billion ($73 billion).
Australia has been ramping up natural gas projects in response to booming demand from China and elsewhere as a less polluting fuel than coal to drive power generators. “It’s very clear that right through the difficulties over Stern Hu, we have maintained a healthy business relationship with China that has been mutually beneficial to both countries,” Ferguson told Australian Broadcasting Corp (ABC). Radio. Ferguson would not comment on the trial itself. “Let’s leave it till the dust settles and then see what is the appropriate way forward,” he told the ABC.
Australia urged greater transparency and protested the court’s decision to keep sessions of the trial dealing with commercial secrets closed, though its consul-general in Shanghai did attend the sessions on bribery charges.
A verdict and possible sentences could come within days, said Tao Wuping, a defense lawyer. He said the business secrets allegedly stolen by the Rio Tinto employees were straightforward commercial information. “The case is not as complicated as the public may think,” said Tao, who nonetheless refused to provide any details on the commercial secrets allegations, citing a court confidentiality order.
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