Anglo-Australian miner BHP Billiton once offered to trade intelligence with Washington on China, its most important market, an Australian newspaper said on Tuesday, citing leaked U.S. cables obtained from WikiLeaks.

The Sydney Morning Herald said the cables showed BHP Billiton Chief Executive Marius Kloppers had offered the exchange of information in 2009 after telling a U.S. diplomat about the extent of Chinese surveillance of his firm.

Kloppers also complained of surveillance from other firms, the newspaper said, citing another Anglo-Australian miner, Rio Tinto, as one of them.

Clearly frustrated, Kloppers noted that doing business in Melbourne (BHP's Australian headquarters) is like 'playing poker when everyone can see your cards', it quoted a U.S. envoy to Australia, Michael Thurston, as saying in a cable.

(Kloppers) complained that Chinese and industrial surveillance is abundant and went so far as to ask consul-general (Thurston) several times about his insights into Chinese intentions, offering to trade confidences, the cable said.

BHP Billiton declined to comment.

BHP Billiton and Rio Tinto each count China as their biggest markets but relations with China have sometimes been tense, especially in the iron ore market which Rio Tinto and BHP Billiton dominate along with Brazil's Vale.

Tensions peaked in 2009 when Chinese steel producers failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes.

Their arrest at the height of fraught 2009 iron ore price negotiations strained ties between Australia and China, and shocked the Chinese steel industry.

BHP Billiton had already riled Chinese steel mills with its 2008 bid to take over Rio Tinto, though BHP Billiton later dropped its offer in the face of stiff global opposition among competition regulators. BHP Billiton upset the mills again in 2009 with a proposed iron ore joint venture with Rio Tinto, a deal that also floundered over anti-competition concerns.

Between those two failed attempts to forge a BHP Billiton-Rio Tinto alliance, Chinese state-owned metals conglomerate Chinalco proposed a $23.9 billion partnership with Rio Tinto, which Rio Tinto initially accepted, but later rejected.

Kloppers took personal credit for quashing that deal, according to Wikileaks, the Sydney Morning Herald reported.

Australia does not want to become an open pit in the southern-most province of China, Kloppers said at the time, according to the report.

(Reporting by Mark Bendeich and James Regan; Editing by Ed Davies and Daniel Magnowski)

Australia China Wikileaks