It's been a busy -- and apparently dangerous -- week for Anglo-Australian mining giant Rio Tinto (NYSE: RTP ) . In addition to raising funds through an asset sale, the company has had a foursome of its Shanghai-based employees detained by Chinese authorities.
Rio Tinto originally stated that it didn’t know why the employees were abducted and detained. Today it came out that the Chinese government is holding them on espionage charges. Rio acknowledged that it is aware of the allegation but is "not aware of any evidence that would support such an investigation.” The identities of the other three employees are unknown, but it appears that one of the detainees is Stern Hu, the general manger who oversees Rio's iron ore operations in China.
Rio Tinto recently spurned a $19.5 billion investment in its operations and assets by Aluminum Corp. of China (NYSE: ACH ) , or Chinalco. The investment would have gone toward paying down the $38 billion in debt that Rio Tinto incurred two years ago when it beat out Alcoa (NYSE: AA ) and clearly spent excessively to acquire Canada's Alcan.
Instead of accepting the Chinese investment, Rio conducted a rights offering that raised $15.2 billion and entered into an iron ore joint venture with mining giant BHP Billiton (NYSE: BHP ) . The latter will fetch it another $5.8 billion. The funds will help it make an $8.9 billion debt payment that is coming due.
Beyond that, Rio Tinto has announced that it is selling the U.S. packaging business that it acquired with Alcan to Wisconsin-based Bemis Co. (NYSE: BMS ) for $1.2 billion. With the acquisition, Bemis, a packager of food and beverages, will add 23 operations throughout the Western Hemisphere. The company will pay for the purchase with $1 billion in cash and the remaining $200 million in equity. Once the sale is complete, Rio will retain packaging operations throughout Europe and much of the rest of the world.
And with all this occurring, Rio Tinto, BHP, and Brazil's Vale (NYSE: VALE ) remain in iron ore price negotiations with the larger Chinese steelmakers, their largest market. The Chinese are attempting to gain price cuts from last year's levels of 40% or more, rather than the approximately 28%-33% reductions to which Japanese and South Korean steelmakers have generally agreed.
But the obvious key for Rio Tinto at this juncture is the safe return of its missing employees. Once that's accomplished, I'd suggest that Fools return their investment attention to this very solid mining and metals entity.
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