China sends Rio case to prosecutors

Four Rio staff, including Australian citizen Stern Hu, have been in Chinese custody since July over accusations of illegally obtaining commercial secrets.

China is Australia's biggest trade partner, with trade worth $53 billion last year. Australia exported $15 billion worth of iron ore to China in 2008, or 41 percent of China's iron ore imports.

The case is now in the hands of the Shanghai People's Procuratorate (prosecutor) who will decide whether it should be brought to trial, said Australia's Department of Foreign Affairs & Trade (DFAT), after being notified by Chinese authorities.

We are not in a position to say how long this phase of the case will take, and are not prepared to speculate about the outcome. Details of the actual charges are not likely to be known until the prosecutors have made their decision on whether the case should proceed to trial, DFAT said in a statement.

The case, which has caused tensions between Australia and China, has placed a cloud over already contentious iron ore price negotiations between China and miners Rio, its fellow Australian miner BHP Billiton and Brazil's Vale.

This transfer is the next stage in a continuing legal process under Chinese law, said Sam Walsh, Rio's chief executive in charge of iron ore.

It would not be appropriate for the company to comment any further at this point in the case other than to reaffirm our hope that matters proceed in an expeditious and transparent manner, Walsh said in a statement.

Chinese prosecutors have about one month to decide whether to go to trial, but could refer the case back to police if they feel the case is not strong enough for a prosecution.

Hu was formally arrested on August 11 with three Chinese executives from the Anglo-Australian mining company, testing China's relations with major resource trade partner Australia.

Australia's conservative opposition's finance spokesman, Barnaby Joyce, said on Monday that Prime Minister Kevin Rudd, a Mandarin-speaking former diplomat with strong China expertise, should become more closely involved in lobbying efforts on Hu's behalf.

(Reporting by Michael Perry; Editing by David Fox)