China's investigation into the alleged theft of state secrets by four Rio Tinto PLC (RTP) employees won't break Sino-Australian economic ties, George Jones, chairman of Australian iron-ore miner Gindalbie Metals Ltd. (GBG.AU), said Thursday.

Jones said people need to let the situation evolve and not jump to conclusions, adding that he hopes China will keep its handling of the Rio case transparent.

Jones, who isn't directly involved in the annual iron-ore price negotiations, said he believes a 33% discount on the pricing for iron ore is "fair value."

Earlier this year, Anshan Iron & Steel Group Corp., or Ansteel, and Gindalbie Metals concluded a deal in which the Chinese steel company took a 36% stake in the Australian miner.

The 2009-2010 contract year iron-ore negotiations between Chinese mills and the world's big three ore suppliers, Rio Tinto, BHP Billiton Ltd. (BHP) and Vale SA (VALE), have been particularly tortuous this year as both sides refuse to back down on the degree of price cuts.

Some Chinese steel mills have agreed provisional prices for iron ore until a final price is set. Several buyers have agreed a provisional 33% discount, likely an indication of the price cuts expected by the Chinese mills.

-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588-5848; chuin-wei.yap@dowjones.com

 
 
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