China becomes Rio's largest market

LONDON: Rio Tinto Group, the world's second-biggest iron-ore producer, has never been so dependent on China as the country prepares to prosecute four of its employees for bribery and obtaining trade secrets.

Shanghai authorities indicted the four, including the Australian head of Rio's iron ore business in China, a day before the world's third-biggest mining company said the Asian nation accounted for almost a quarter of its revenue in 2009.

"For the first year, China became our largest single market," said chief executive Tom Albanese. "In those businesses that are supporting the Chinese market, particularly iron ore, we've never seen stronger demand."

China's relations with major economies have soured over disputes from tackling climate change and arms sales to Taiwan to cyber attacks against Google. At the same time, foreign companies are relying on China to support profits as demand slumps in crisis-plagued developed countries.

Rio gained 3 per cent to A$71.82 ($91.58) on the Australian stock exchange yesterday morning. Rio Tinto on Thursday evening announced an underlying profit of US$6.298 billion ($9 billion).

The four's trial may begin within weeks, the Australian Financial Review reported yesterday, citing Graham Fletcher, a first assistant secretary for Australia's Department of Foreign Affairs and Trade. The Chinese Government may allow an Australian government representative to attend the trial, the newspaper said, citing Fletcher.

London-based Rio's sales to China overtook North America and Europe in 2009, reaching 24.3 per cent of the total from 18.8 per cent a year earlier, it said yesterday. The proportion of sales to China, the world's biggest iron-ore consumer, has doubled since 2004.

- BLOOMBERG, AAP