* Investors “slightly concerned” about Chinese allegations
* BHP-Rio iron ore joint venture planning goes ahead (Adds BHP and fund manager comments)
By Sonali Paul
MELBOURNE, Aug 10 (Reuters) - Shares in global miner Rio Tinto Ltd (RIO.AX) fell as much as 2 percent on Monday as investors turned a little nervous after China stepped up espionage allegations against the world’s second-largest iron ore miner.
China’s state secrets agency said on its Web site on Saturday that Rio Tinto had spied on steel mills for six years which led to them overpaying $102 billion for iron ore, Rio Tinto’s biggest earner. [ID:nSP355330]
The company declined to comment on the report, which followed China’s detention a month ago of four Rio Tinto (RIO.L) employees in Shanghai on suspicion of stealing state secrets. The men, including Australian Stern Hu, remain in detention and have yet to be charged.
Rio Tinto said last month that its employees had done nothing wrong.
Investors said it was hard to assess what the latest comments might mean for Rio Tinto and other iron ore exporters like top producer Vale VALE5.SA of Brazil and BHP Billiton (BHP.AX)BLT.L.
“It has to be a concern for anybody marketing anything into China,” said Tim Barker, an analyst at BT Investment Management.
He said China appeared to be using the spying issue to reassert control over iron ore price talks at a time when some Chinese mills have independently signed new contracts while the China Iron and Steel Association is pressing for bigger cuts than agreed by other Asian mills.
Analysts also said the dollar figure the state secrets agency reported was more than double Rio Tinto’s total annual iron sales revenue of $42.6 billion over the past six years.
“It’s very difficult to find any reasonableness surrounding the latest claims, given the orders of magnitude and lack of detail,” said Tim Schroeders, portfolio manager of Pengana Capital’s global resources fund.
“There’s a little bit of nervousness about the allegations.”
Rio shares were last down 1.5 percent at A$59.66 after touching a low of A$59.32, in a broader market that was trading 0.6 percent higher.
BHP Billiton, which is working with Rio Tinto to combine their iron ore mining operations, declined to comment on the tension between China and Rio. Spokeswoman Samantha Evans said work on the production joint venture was going ahead. (Editing by Jonathan Standing)