Rio Tinto's iron ore sales team has been arrested in Shanghai, threatening a diplomatic rift between Australia and China.

Officers from China's Public Security Bureau are reported to have raided the Anglo-Australian mining group's Shanghai offices and removed computers used by each of the four executives, who have been detained since Sunday.

The Australian Government is today seeking urgent consular access to Stern Hu, an Australian passport holder among the arrested men. The other three men are Chinese passport holders. The company and Australian diplomats have been given no reason for the arrests.

The Age newspaper in Melbourne quoted a source as saying: "They just failed to turn up to work on Monday and have disappeared." The newspaper also reported that Mr Hu had failed to answer his mobile phone on Tuesday night.

Rio said it was concerned about its employees’ wellbeing and was doing everything possible to help them and support their families.

“The reasons for these actions are unclear. Rio Tinto intends to co-operate fully with any investigation the Chinese authorities may wish to undertake and has sought clarification on what has occurred,” the company said in a statement.

The arrests come amid bitter negotiations over iron ore sale contracts and Chinese fury over Rio Tinto's decision earlier this year to abandon a $19.5 billion (£12 billion) deal with Chinalco, the state-owned metals group, in favour of a joint venture with BHP Billiton, its bitter rival.

Rio and other iron ore suppliers are locked in discussions with China’s steel mills about iron ore pricing for 2009-10. These issues have not been resolved even though many contracts expired on 30 June. Rio has refused Chinese demands for a bigger price cut.

The Age reported that Rio's iron ore team had avoided meeting in China for more than a month over concerns that their phones and emails were being bugged and that information was finding its way straight back to the China Iron & Steel Association. The team had flown to Hong Kong and Singapore for meetings instead, the paper claimed.

Greg Combet, Australia's Minister for Defence Personnel, Material and Science, said he did not know the reason for Mr Hu's arrest.

"The Government of course is making every effort at the moment to do that through the appropriate mechanisms, through the embassy in China and the consulate in Shanghai," Mr Combet told reporters at Parliament House.

A spokesman from the Department of Foreign Affairs and Trade in Canberra confirmed to The Times that an Australian was being held in China but was unable to comment on the reasons for his arrest.

The spokesman said: "The Australian Embassy in Beijing and our Consulate-General in Shanghai have confirmed with the Chinese authorities that an Australian employee of Rio Tinto Australia has been detained.

"We are seeking urgent consular access and are in communication with the man’s family and his employer."

A Rio spokesman said the company had asked Chinese authorities to explain why the four were detained but had not yet had a response. "Rio Tinto intends to co-operate fully with any investigation the Chinese authorities may wish to undertake and has sought clarification on what has occurred," the company said in a statement.

Rio’s Shanghai office is mainly a sales and marketing base for the world’s second-biggest iron ore producer, which is listed in London and Sydney.

“Obviously China is a very big market for us, particularly in terms of iron ore, so we have quite a significant presence in China,” the spokesman said.

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