WRAPUP 1-Rio rejects Chinese bribe reports

(For full coverage of the iron ore probe, click [ID:nSP473911]) * Rio says Chinese bribe claims unfounded

* Miner says very concerned for detained staff

* Rio maintains high levels of iron ore shipments to China

* Australia says detainees not guilty, China still investigating spy case

By Rob Taylor and Tom Miles

CANBERRA/BEIJING, July 17 (Reuters) - Global miner Rio Tinto (RIO.AX) on Friday strongly defended its four employees being held in China on accusations of industrial espionage, saying claims they bribed Chinese steel mills were unfounded.

The Anglo-Australian miner said it was "very concerned" for its workers, held in Shanghai since July 5.

The detention of Australian Stern Hu and three Chinese colleagues have strained Australia-China ties, with Beijing warning Canberra not to interfere in its judicial independence.

The detentions have also unsettled the global iron ore trade, but Rio, which sells billions of dollars worth of iron ore to Chinese steel mills each year, said it was maintaining high tonnages of iron ore shipments to China.

"Rio Tinto believes that the allegations in recent media reports that employees were involved in bribery of officials at Chinese steel mills are wholly without foundation," Sam Walsh, chief executive of Rio Tinto's Iron Ore division said.

"We remain fully supportive of our detained employees, and believe that they acted at all times with integrity and in accordance with Rio Tinto's strict and publicly stated code of ethical behaviour," Walsh said in a statement.

China detained the four workers on allegations of stealing state secrets related to sensitive iron ore price negotiations.

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). Iron ore is used to make steel.

This year's negotiations have been fraught, since they coincided with the collapse of a deal by Chinese state-owned aluminium firm, Chinalco, to increase its stake in Rio.

BILATERAL WARNINGS

Australia and China traded warnings on Thursday over the spy case, while the United States urged Beijing to ensure transparency and fair treatment for staff of foreign companies.