Rio seeks to strengthen ties with China

RIO Tinto chief executive Tom Albanese has stressed the importance of China to the major miner’s future success as the trial of Rio executive Stern Hu and three of his colleagues kicks off in Shanghai.
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Rio Tinto chief executive Tom Albanese

Staff Reporter

Speaking to the China Development Forum in China this week, Albanese talked up the need for a positive relationship going forward between China and the company.

“Being here today underlines the importance of our long-standing partnership with China. Our commercial ties go back some 50 years,” he said.

“Most of this time we have enjoyed a strong relationship with China. Only in the last year have we come upon some difficulties, which we are working hard to resolve.”

Albanese’s comments come on the day that the trial of Stern Hu and three other Rio employees began in Shanghai.

The Rio employees were detained in China on July 5, 2009, during contentious iron ore price talks with China’s steel industry group.

“This issue is obviously of great concern to us, as it would be for any company operating in China,” Albanese said.

“I can only say we respectfully await the outcome of the Chinese legal process.”

Albanese also laid down two ideas that would help strengthen the partnership between Rio and China.

“Both are aimed at assisting in achieving China’s goal of securing a sustainable supply of raw materials over the long term,” he said.

“My first idea revolves around China’s growing interest in acquiring resources abroad, a theme I first raised at this forum two years ago, and of which the proposed Simandou joint venture is a good example.

“China has become a global player in resource development, with mining accounting for about a quarter of China’s outbound investments.

“Yet to develop its overseas brand, China will need to reflect on the global impact of its activities.

“Mutual cooperation with senior Chinese state-owned enterprises on projects abroad could unlock hidden value.”

Albanese also said resource extraction not only involved capital and technology but also a focus on sustainable development.

“Companies must follow leading practices on environment, safety, and community engagement,” he said.

“With our experience, Rio Tinto can help meet this need.

“We have developed projects all over the world and have learned the value – in both human and commercial terms – of understanding the social, environmental and economic impacts on local communities.

“For example, we have left positive legacies in Africa going back 50 years. We always make sure we create jobs for local people. For example we are the largest private sector employer of indigenous Australians.”

Albanese added the potential joint venture with Chinalco for development of the Simandou iron ore project in Guinea would provide an opportunity to manage a project with significant social and environmental challenges.

“We are conducting significant baseline studies and impact assessments to guide our mine and infrastructure development plans,” he said.

“This way of working is what we can bring to the partnership with Chinalco on projects of a similar nature to Simandou, involving Chinese outbound investment.”

With a strong focus on sustainable development, Chinese companies can succeed anywhere in the world. This, in turn, will help China truly become a world economic leader.

Meanwhile, Albanese also said Rio could assist China in the search for mineral resources in its own backyard.

“In saying this, let me stress that I recognise China has considerable expertise in this area and that a lot of exploration work is being undertaken in China and that new resources are being discovered here,” he said.

“That said, however, I do believe that our long experience in exploring for and finding mineral resources around the world could usefully be brought to bear to supplement China’s own efforts.

“Together with China, we can both continue to grow and prosper.”