BEIJING (Commodity Online): Following a court's decision to send four of steel giant Rio Tinto's employees to jail for accepting bribe, the world is waiting with bated breath to see how the steel firm reacts to the Chinese government's move.
The verdict has cast a cloud over China as a destination for global firms to do business. After the verdict, the Australian government and media had expressed concerns over the trial and the conviction of Rio's four employees, including its China head.
Relations between China and Rio had soured following the arrest of the company's employees last year during the peak of negotiations over steel prices.
After that Rio had decided to stop talks with China over iron ore supply. All four men worked for Rio, including its head of iron ore operations in China, and all four are now off to jail.
China and Rio have history, going back to Rio's snubbing of the state-backed Aluminium Corporation of China's $19.5bn investment at the beginning of 2009 when the miner's balance sheet was in dire straits.
So, market analysts asked is it revenge? China has charged the four with obtaining commercial secrets too, that part of the trial being held in closed court. That allegation has been left dangling over Rio which could yet be embroiled in further controversy.
Rio has washed its hands of the four, having fired them, and must now hope it can resume better relations with the Chinese and get back to business as usual, as far as it can be in China.
However, Australia warned that China's handling of a corruption trial for four Rio Tinto workers had raised serious questions for foreign firms doing business with the emerging power.
Australia's Prime Minister Kevin Rudd condemned bribery but voiced reservations about the commercial espionage conviction, which was dealt with behind closed doors.
The trial on the second charge was held in secret with no media and no Australian officials present for it. This has left therefore serious unanswered questions about this conviction, Rudd said.
In holding this part of the trial in secret, China I believe has missed an opportunity to demonstrate to the world at large transparency that would be consistent with its emerging global role.
Foreign minister Stephen Smith said the case could raise concerns for foreign companies doing business in China, particularly regarding its definition of commercial secrets.
Prime Minister Rudd added that Australia's relations with its top trading partner would not be affected by the case, which caused a temporary chilling of ties last year.