Jeremy Wilkinson | Stuff NZ | October 10 2016
A Chinese company once caught up in a multi-million dollar bribery scandal is a key investor in a New Zealand company proposing to mine iron ore off the South Taranaki coast.
The Tianjin Rock Check Steel Group is a Chinese company with a 6.6 per cent share and a place on the board of directors at mining company Trans Tasman Resources, TTR.
TTR has applied to mine iron ore in a 66 square kilometre area of seabed off the South Taranaki coast. It is the company’s second application after being denied in 2014 because not enough was known about the potential environmental impacts of the mining on the area.
In 2010 its Chinese investor Rock Check was embroiled in a bribery scandal that involved millions in bribes being paid to employees of Rio Tinto, one of the world’s largest mining companies.
Rock Check was one of 20 Chinese companies implicated in bribing four Rio Tinto employees to obtain iron ore pricings that allowed the companies to gain a bidding advantage over their competitors.
Rock Check’s then-president Xiangqing Zhang was named in court documents reported on by the Sydney Morning Herald and China Daily as being one of the biggest benefactors of the espionage.
Court details revealed by Melbourne newspaper The Age and reported in the Sydney Morning Herald stated the Shanghai No. 1 Intermediate People’s Court verdict detailed how Xiangqing was one of two Chinese steel billionaires who both gave bribes to Rio Tinto salesman Wang Yong and credited him for helping to build their steel empires.
Investigators found RMB99m (NZ$20m) in Yong’s bank accounts.
It was reported Xiangqing suffered no consequences from the case.
Before his death in 2014, Xiangqing was well known in China as a tycoon with a “tender heart and steel spirit”. It was reported in China Dailythat in 2008 he donated RMB100m (NZ$20m) for the rescue and rehabilitation of victims of the Sichuan earthquake in May that year.
Rock Check is headed now by Xiangqing’s wife Ronghua Zhang.
Trans Tasman Resources formed in 2011, one year after the Rio Tinto scandal, and launched a bid in late 2013 to mine a 66 square kilometres patch of seabed off the South Taranaki coastline of 50 million tonnes of iron ore laden sand per year.
Their bid was rejected in 2014 by government’s Environmental Protection Agency on the grounds not enough was known about the environmental impact of the proposed mining activities.
TTR would not answer questions about whether they knew of Rock Check’s involvement in the 2010 bribery scandal.
A spokesperson for the company said Rock Check had acquired their shares in TTR by investing in the company when it was formed in 2011, the same as any other investor.
” They initially acquired a board position and a conditional offtake agreement to purchase iron ore, which was subsequently terminated several years ago,” the spokesperson said.
“TTR has no commercial arrangements or contracts with Rock Check.
“They remain a shareholder and entitled to a board seat but do not participate in, or control, the management or operations of TTR.”
The spokesperson said Rock Check still had interests in New Zealand as “a significant customer” of NZ Steel’s Taharoa operation.
Several attempts were made to contact the Tianjin Rock Check Steel Group through their website and via phone over the course of several days. They were unsuccessful.