SHANGHAI — Not long ago, China and the British-Australian mining giant Rio Tinto seemed to be locked in battle.
First, Rio rebuffed a proposed $19.5 billion investment deal with the Aluminum Corporation of China, or Chinalco, one of the biggest state-run companies. Then, China arrested and convicted four Rio employees, including an Australian citizen, of taking bribes and stealing commercial secrets from Chinese steel makers.
Rio and other iron ore producers then introduced a quarterly iron ore pricing method that the Chinese authorities did not like.
But last month, Rio signed a deal to develop with Chinalco a huge iron ore project in the West African country of Guinea. And this last week, on a visit to Shanghai, Thomas Albanese, Rio’s chief executive, posed for photographs with Chinese officials and declared China not just a customer but a partner.
“The key for what we want to do in China is to develop long-term relationships,” Mr. Albanese said on Friday. “We’re focusing on capacities to co-invest.”
He declined to discuss the highly publicized trial, instead noting that Rio had “faced some challenges in China over the past year.”
Analysts say Mr. Albanese’s comments are the strongest indication yet that Rio Tinto — one of the world’s biggest mining companies — is trying to change the way it does business here and repair its relations with the Chinese government.
“Rio Tinto’s image was badly hurt in China” last year, said Xu Xiangchun, an analyst at Mysteel, a consulting firm in Shanghai. “Because China is its biggest market, Rio Tinto knows it’s really important for them to mend the relationship. The Simandou project in Africa is a sign that Rio Tinto is trying to improve its image here.”
Rio Tinto seems eager to put the trial of its former employees behind it and search for ways to ensure that the company continues to profit from China’s blistering growth. At the same time, China hopes working with Rio Tinto will allow it to strengthen its search for natural resources at home and abroad.
China is already Rio Tinto’s biggest market, accounting for about a quarter of the company’s $40 billion in annual revenue. And Rio Tinto and other mining giants are betting that China’s urbanization drive will continue to fuel profit growth. China is, by far, the world’s largest steel producer — and much of its high-quality iron ore is imported from Australia.
Many analysts, however, say soaring prices for iron ore continue to be a source of growing tensions between Rio Tinto and the Chinese authorities. As early as 2005, state-owned steel makers were furious about rising ore prices. The state-controlled China Iron and Steel Association even accused Rio Tinto of manipulating prices, a charge the company strongly denied.
The Chinese authorities grew more alarmed in 2009, after a proposed joint venture between Rio Tinto and BHP Billiton threatened to give the mining giants extraordinary power over the price of iron ore, a vital ingredient in making steel.
The planned joint venture remains a major issue. It has faced strong opposition from steel mills in Europe and China, where state-owned steel companies have been complaining for years about rising iron ore prices and the market power of a few large global producers.
An Australian newspaper reported Friday that the joint venture might be doomed by regulatory opposition, but Mr. Albanese said he had not given up on the plan.
“We said it would deliver strong synergies. That is the case then, and it is now,” he said. “But we knew from the beginning we’d have to obtain regulatory approvals in the E.U., Asia and elsewhere.”
Whether or not that venture is approved, Rio seems to be moving ahead on mending fences. After initially expressing support for the four employees who were put on trial, Rio dropped its support, fired them and described the evidence against them as convincing.
On the first day of the Shanghai trial, top Rio executives met Prime Minister Wen Jiabao at the China Development Forum in Beijing.
And last month, Rio Tinto held a ceremony in Beijing to sign the joint venture agreement with Chinalco, which still has a 9 percent stake in Rio Tinto.
In a speech Thursday, before a gathering of journalists, mining executives and Australian and Chinese government officials, Mr. Albanese said the partnership “opens the potential for further cooperation with China’s state owned enterprises.”
What is at the top of Rio Tinto’s list in China?
“Finding opportunities for mutual investment,” Mr. Albanese said.
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