Rio Tinto's China employees detained

The plot thickens over China’s iron ore price negotiations. Four Shanghai-based employees of Anglo-Australian miner Rio Tinto – no favorite of Beijing at present following the breakdown of Aluminum Corp of China’s investment in the company – have been detained without explanation. The detention of the four members of Rio’s iron-ore sales team comes days after China rejected an offer of a 33% cut in iron ore contract prices for 2009-10. With many of the previous year’s contracts having expired last week, Rio is now in a position to sell ore to Chinese steelmakers at spot prices, which are high and expected to rise higher. Taking the Rio sales team out of commission would seem an odd – and presumably futile – means of addressing this problem, but then no one knows why the "Rio four" are being questioned. What we do know is that China is keen on securing natural resources at favorable prices (hence the brinkmanship over iron ore). Iran knows it too. Fresh from losing foreign friends and alienating domestic voters, Tehran has invited China to participate in a collection of refinery and pipeline deals potentially worth over US$42.8 billion. The deals come with sweeteners galore – discounts, tax breaks, easy access to profits and opportunities to boost equity ownership. It’s not quite a "you name it, we’ll include it" offer, but it seems pretty close. The situation is reversed, meanwhile, regarding Beijing Automotive’s bid for a 51% stake in General Motors’ Opel assets in Europe. So keen is the Chinese automaker to get its hands on GM’s advanced technology, that it is has included a sweetener of its own – a US$2.25 billion investment to ramp up Opel production in China.