Shares in global miner Rio Tinto Ltd fell more than 3 percent on Monday after a Chinese magazine published additional spying allegations against the company.

Dual-listed Rio Tinto's were down 3 percent at 2,347 pence in London at 1258 GMT (8:58 a.m. EDT), slightly underperforming a generally weaker mining sector <.SXPP>, having closed 3.3 percent lower at A$58.55 in Sydney.

Rio Tinto had spied on Chinese steel mills for six years, resulting in the mills overpaying $102 billion for iron ore, Rio Tinto's biggest earner, according to an article in the online edition of a magazine published by China's state secrets agency.

That overpayment allegation echoed the findings of an earlier study conducted by a Chinese university professor, but it was not clear if the article had any other basis for its argument.

The magazine's website (www.baomi.org) was inaccessible for most of the day on Monday.

When it reopened late on Monday, the article with details of the allegations was no longer accessible. A second article that referred to the Rio case in calling for greater protection of commercial information was still available on the website.

Rio Tinto declined to comment on the accusations, which followed China's detention of four Rio employees -- including Australian citizen Stern Hu -- a month ago in Shanghai on suspicion of stealing state secrets.

The company said last month its employees had done nothing wrong. The men remain in detention and have yet to be charged.

The allegations referred to on the National Secrets Protection Bureau website are not new, a spokeswoman for Australian Foreign Minister Stephen Smith said in a statement.

The (Australian) government has always said the Stern Hu case was complex and involved serious allegations. The government has urged the Chinese authorities to deal with his case expeditiously, the spokeswoman said, adding Australia would continue to make representations to Beijing over Hu's case.

The article said Rio Tinto's commercial spying involved winning over and buying off, prying out intelligence ... and gaining things by deceit over six years.

The detentions have raised concerns about doing business in China, strained ties with Australia and overshadowed 2009 price talks on iron ore, which is used to make steel.

It sets a negative precedent for the whole industry, said Nick Hatch, analyst at ING. It raises questions for the whole mining industry in terms of supplying China.

Australia exported A$18 billion ($15 billion) worth of iron ore and concentrates to China in 2008, accounting for 41 percent of China's iron ore imports last year. The ore came mainly from Rio and BHP Billiton , although other Australian companies shipped the mineral as well.

CONCERN FOR INVESTORS IN CHINA

Investors said it was hard to assess what the latest comments might mean for Rio Tinto and other iron ore exporters such as Vale of Brazil and BHP. The article said some of the information had come from computers seized from Rio.

China surpassed Europe and Japan as the biggest iron ore importer roughly six years ago, setting off an unprecedented rise in spot iron ore prices.

Term prices also climbed, but for most of that period remained lower than the spot market, thus benefitting the large Chinese mills that were able to access cheaper, good quality iron ore through term contracts with Rio, BHP, and Vale .

It has to be a concern for anybody marketing anything into China, said Tim Barker, an analyst at BT Investment Management.

Barker said China appeared to be using the spying issue to reassert control over iron ore price talks at a time when some Chinese mills have independently signed new contracts while the China Iron and Steel Association is pressing for bigger cuts than agreed by other Asian mills.

Analysts pointed out that the $102 billion that Chinese steel mills overpaid, according to the article, was more than double Rio Tinto's total iron ore sales revenue of $42.6 billion over the past six years.

The figures appear to derive from a calculation by a Chinese professor that were quoted by the Southern Metropolis Daily in mid-July, although there was no indication of what figures the professor had used to come up with his overpayment estimate.

It's very difficult to find any reasonableness surrounding the latest claims, given the orders of magnitude and lack of detail, said Tim Schroeders, portfolio manager of Pengana Capital's global resources fund.

There's a little bit of nervousness about the allegations.

BHP Billiton, which is working with Rio Tinto to combine their iron ore mining operations, declined to comment on the tension between China and Rio. Spokeswoman Samantha Evans said work on the production joint venture was going ahead.

(Additional reporting by Sonali Paul in Melbourne, Lucy Hornby in Beijing and Julie Crust in London; Editing by Bill Tarrant and Erica Billingham)

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