Australian Trade Minister Simon Crean on Monday welcomed a report that China had cleared Rio Tinto and the Australian government of blame for the collapse of a $19.5 billion tie-up between Chinalco.

Chinalco had agreed on a $19.5 billion equity and asset tie-up with Rio Tinto last February, which the Anglo Australian miner abruptly called off in June when it decided instead to raise money through a rights offer and form an iron ore joint venture with BHP Billiton .

The collapse of the deal soured relations between Australia and China and a month later China arrested four Shanghai-based Rio Tinto staff, including Australian citizen Stern Hu, on allegations of spying and bribery, deepening the rift.

A report to the State Council, or China's cabinet, said the Chinese deal failed because Chinalco did not do enough to engage other Rio shareholders or to fight the public relations war in Australia, The Age newspaper said on Monday. It also said the arrest of Hu and the other three staff did not come in revenge for the Chinalco deal failure.

(Reporting by Michael Perry; Editing by Balazs Koranyi)

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