Chinese steel magnate in Rio Tinto trial 'banned from leaving province'

A Chinese steel tycoon who admitted giving $9 million to an employee of mining giant Rio Tinto may have been barred from leaving the province of Shandong.

Billionaire Du Shuanghua was a surprise witness in the Rio Tinto Four trial last month, in which private steel mills and independent iron ore traders were named as the source of bribes paid to four Rio Tinto employees to secure low-cost iron ore contracts enjoyed by China's state-owned steel mills.

Du's status could be an important indicator of the trial's consequences for China's private steel sector, which accounts for just under half of national output but lacks the political clout of state industry.

"Within the industry there is talk that Du Shuanghua has already been restricted from leaving Shandong," said the Beijing Times, owned by the People's Daily, the mouthpiece of the Communist Party.

Du's firm, Rizhao Steel, ran up against the interests of state-owned Shandong Iron and Steel, which planned to merge its mills and build a plant in Rizhao, a port north of Shanghai.

Shandong took over most of Du's interests in Rizhao Steel in September, shortly after the formal arrest of the four Rio Tinto employees at the height of fraught negotiations over 2009 term iron ore prices.

Du kept a portion of his stake by moving it into Kai Yuan Holdings, a Hong Kong-listed firm.

Rizhao Steel was unavailable for comment today. Last month, a Rizhao official said Du was on a business trip, but declined to say when he would be back.