China's Rio investigation ongoing says Australia

(For full coverage of the iron ore investigation, click [ID:nSP473911]

CANBERRA, July 17 (Reuters) - China has not yet reached a conclusion that four detained Rio Tinto (RIO.AX) staff accused of industrial espionage are guilty and investigations are ongoing, Australia's Foreign Minister Stephen Smith said on Friday.

Smith, who discussed the detentions with China's Vice Minister for Foreign Affairs He Yafei at a meeting in Egypt on Thursday, said statements by an official in Beijing that the four had harmed China's economic interests were not conclusive.

"That doesn't sit with the meeting that I had, or the statements made to me which are that the investigation against Mr Hu, and others associated with him who are also under detention, is ongoing," Smith told Australian state radio.

Australia and China traded warnings on Thursday over the Rio employees detained for spying, as the United States urged Beijing to ensure transparency and fair treatment for staff of foreign companies.

Over a week after detaining Australian Rio executive Stern Hu and three of Chinese colleagues on allegations of stealing state secrets related to sensitive iron ore price negotiations, China's Foreign Ministry warned Canberra against interference.

Smith said Australia understood the matter was "subject to an investigation, subject to Chinese law and Chinese potentially criminal, legal and judicial processes", and had made that point to He during their meeting.

"An investigation is underway. He (Stern Hu) has not yet been on the receiving end of charges. If and when he is, we will deal with it at that point in time," Smith said by telephone from Dubai.

The detentions have complicated annual negotiations on iron ore contract prices between Chinese steel mills and Australia's top mining firms Rio and BHP Billiton (BHP.AX)(BLT.L).

This year's negotiations have been particularly fraught, since they coincided with the collapse of a deal by Chinese state-owned aluminium firm, Chinalco, to increase its stake in Rio. (Reporting by Rob Taylor; Editing by James Thornhill)