Rio Tinto today expressed "surprise" at claims made by China's state media that four of the Anglo Australian mining giant's employees bribed local workers during annual iron ore supply contract talks.

Stern Hu, an Australian citizen, and his three Chinese co-workers who run Rio Tinto's Shanghai office, were detained on Sunday on charges of stealing top secret information.

A document has now emerged from the Shanghai office of China's internal security agency alleging that the four employees had bribed Chinese steel company workers during discussions over iron ore contracts, according to the China Securities Journal, an official newspaper published by the Xinhua news agency.

It said that the Rio Tinto employees "used improper methods, roping in and bribing officials at Chinese steel producers," adding: "This seriously damaged China's economic security and interests."

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 June 30. Rio Tinto has refused Chinese demands for a bigger price cut.

A spokesman for Rio Tinto said: "Rio Tinto is following developments very closely. The company is surprised and concerned by the allegations. We are not aware of any evidence that would support them. Rio Tinto is committed to high standards in business integrity and takes its ethical responsibilities very seriously.

"Rio Tinto has not been informed by the Chinese authorities of any charges in relation to these allegations. We remain ready to assist these authorities in their investigations. We will continue to contribute to work to support our employees and their families in China. In this regard we are liaising very closely with the Australian government."

Australia's Foreign Minister, Stephen Smith, said today: "China has its own laws about state secrets, they are clearly broader than the view that Australia might take.

"Frankly, it is difficult for a nation like Australia to see a relationship between espionage and national security and what appeared to be suggestions about commercial or economic negotiations."

"Having said that," Mr Smith continued, "Mr Hu now ... runs the risk of being subject to Chinese criminal, legal and judicial processes.''

If convicted of espionage, the four Rio detainees could face life in a Chinese prison. Australian consular officials are due to visit Mr Hu in detention later on Friday.

Chinese officials in Canberra reassured Mr Smith's office that Mr Hu is being treated well and in accordance with Chinese law.

Chinalco, China's state-owned metals giant, said in a statement Friday that the detention of the Rio Tinto employees was not related to its failed bid earlier this year to invest $19.5 billion (£12 billion) in the Anglo Australian business.

Rio Tinto abandoned the deal under pressure from shareholders, opting instead to form a joint venture with BHP Billiton, its long-term rival, and a $15 billion rights issue.

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