Wednesday, July 8, 2009

Australian iron ore employees detained in China

Shipments of iron ore have been driving up the demand for bulk carriers. China is the biggest buyer of iron ore.

I guess the Chinese think "playing hard ball" includes detaining those who are negotiating.

Just kidding. I hope there is some other explanation.

From Bloomberg News

By Jesse Riseborough and Brett Foley

July 8 (Bloomberg) -- Rio Tinto Group, the world’s second- biggest iron ore exporter, has four employees detained in China amid a deadlock in annual price talks for the ore.

Rio hasn’t had contact with the workers from the Shanghai office since they were detained July 5, spokesman Nick Cobban said yesterday by phone from London. ....

Chinese steel mills are seeking a bigger price cut than the 33 percent agreed on in May between London-based Rio and Japanese, Korean and Taiwan producers, Hebei Iron & Steel Group Vice President Tian Zhiping said on July 2. Rio was criticized in China after it rejected a planned $19.5 billion investment by Aluminum Corp. of China in favor of a share sale and an iron ore joint venture with BHP Billiton Ltd.

China is “playing a bit of a dangerous game,” Ric Ronge, who helps manage the equivalent of $1 billion at Pengana Capital Ltd. in Melbourne, said today. “The fact of the matter is China needs the material and Rio needs to sell the material.”

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