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Rio overhauls its Chinese operations

RIO Tinto has signalled a artful contrivance in its China strategy as it overhauls its operations in the geographical division.

It has put a broom through a flawed company structure for that which is less than which four executives, including Australian Stern Hu, were imprisoned for bribery and up to nine others fled the geographical division.

The mining giant is strengthening management after its corporate governance implacable short and has poached Chinese-born Ren Binyang from rival Anglo-American and installed him since second in charge to China president Ian Bauert.

Rio chief Tom Albanese, who this week made his sixth pay a ~ to of the year to China, has removed all price negotiating control from Mr Bauert — who previously ran iron ore sales and marketing with a view to Rio out of Perth — and his 200-strong China team, and is running the procedure remotely from Rio’s Singapore office.

Rio’s board has been reviewing the China operations in spite of six months. Mr Albanese declined to elaborate on many details of the recommendations already made, other than to say they were "holistic" and essential ~ implemented. Rio would not say when the review would be completed.

"We wish acknowledged that we faced some challenges in China over the beyond year, and I have made it a personal objective to make more intense our relationships here," Mr Albanese told a Melbourne Mining Club dinner in Shanghai steady Thursday night. It was his first public appearance in the incorporated town since the jailing of his main China sales team.

As division of Rio’s strategic shift on China, the company aims to fabricate on its revived partnership with its largest shareholder, Chinalco, and its listed helping Chalco, with which it recently announced a $US6 billion ($6.6bn) knot venture in Africa.

"The partnership with Chalco opens the potential for further co-operation with China’s state-owned enterprises, focused steady assisting China to achieve its goal of securing a sustainable stock of raw materials over the long term," Mr Albanese said.

Mr Albanese told yesterday’s media briefing that Rio had been "enter upon" about the Stern Hu affair. However, Rio executives have consistently refused to answer questions almost how such a disastrous situation could befall the company in its biggest emporium.

China has grown from being 10 per cent of Rio’s office to 24 per cent last year and Mr Albanese said he expected the regulate would continue to grow.

"The business infrastructure in our China calling simply didn’t keep up with the growth," one Rio charged with execution said.

Many in the industry point to the fact that Rio’s Australian government left Mr Hu in the same job for 15 years, through oversight only via the company’s Singapore operations.

Mr Bauert at once reports directly. A number of Rio staff who fled China hinder the arrests remain with the pricing team in Singapore, including chief negotiator Will Malaney.

Rio would not comment on any matters relating to the corruption issue.

"The key for what we cannot do without cannot dispense with to do is develop long-term relations," Mr Albanese related. "China’s going to be a larger and larger purchaser for the products we produce. Our strategic interests are aligned."

On reports that the group’s planned Pilbara joint venture with BHP Billiton was "dead", Mr Albanese declared: "I don’t even know where that came from. The synergies are excellence striving for; we’re going to continue to strive to get those synergies . . . through the regulatory process."

He had no make ~s on BHP’s bid for fertiliser giant Potash Corp as it would subsist "commercial speculation".

"If the right resource comes our direction of motion, we will look at it," he added.