Rio Tinto, BHP Billiton and other Australian mining companies have continued to trade with a Chinese steel billionaire Du Shuanghua after he confessed to paying bribes to a Rio Tinto executive.

The revelations come from a document leak to the International Consortium of Investigative Journalists, named the Pandora Papers.

That cache includes 12 million documents from 14 offshore providers.

The files show that Rio Tinto has traded more than $US200 million ($275 million) with the mogul's steel companies — via a Singaporean intermediary — for years after the bribery scandal broke in 2010.

Other Australian-based operations — including BHP Billiton and companies now owned by Sanjeev Gupta, currently under investigation for fraud in the UK — have also traded with Mr Du's investment vehicle.

The Pandora Papers clearly show that Mr Du is the beneficiary of a company called Bright Ruby Resources (BRR), through six layers of trusts and holding structures.

These files also show that — while Mr Du was being investigated by Chinese authorities for the Rio Tinto case in 2009 — he began to establish offshore trusts and entities.

He has since successfully stashed his massive amount of wealth — accumulated via political connections and briberies — in offshore tax havens and jurisdictions such as Singapore.

The secret transactions between the Australian and international mining behemoths with companies now shown to be owned by Mr Du raise serious questions for Rio Tinto and its shareholders about the transparency of its business dealings.

Some trade experts believe the secrecy surrounding Mr Du and his political connections in the Chinese Communist Party (CCP) also represent a geopolitical risk to his trading partners in Australia.

"Current policy shifts in China indicate a re-balancing is occurring there between private entrepreneurs and the State and the Party-State has the power … and it is understood in China that the CCP will make the 'sensitive' decisions," said Charles Darwin University  University Fellow in Law Dr John Garrick.

"It is very important to know who is who, and to use networks when working on investments — including when solving commercial or contractual disputes."

Who is Du Shuanghua?

In the coastal city of Rizhao, Du Shuanghua is a household name.

The secretive, low-key steel magnate founded China's largest private steel manufacturer, Rizhao Steel Holding, and once landed on the second spot on the Hurun Rich List, with a net worth of $7.4 billion (35 billion yuan).

His success brought top-level political connections and power, leading Mr Du to be appointed as a deputy to the People's Congress of Hengshui City and, later, Hebei Province, from 2003 to 2008.

In Hengshui, where Mr Du held the political position, he used a local court to divorce his wife without her knowledge, took custody of the children and, despite his immense wealth, gave his wife a basic income.

Mr Du also maintains a long business relationship with former Chinese president Hu Jintao's family via an investment holding company in Hong Kong.

Billionaire briber

Back in the early 2000s, the Chinese iron ore market was dominated by sellers, with British-Australian mining giant Rio Tinto, along with BHP, almost controlling the market in China.

At the time, Mr Du's Rhizao Steel did not have an import licence but the company still managed to secure access to iron ore from Rio Tinto at a competitive rate.

Later, in a high-profile and controversial espionage case, it became apparent that this success was built on bribes.

In 2010, four employees of Rio Tinto were charged for accepting millions of dollars from Chinese steel companies and stealing state (commercial) secrets.

In a closed trial in China, Du Shuanghua testified as a witness and admitted giving $US9 million ($12.4 million) in bribes to one of the Rio Tinto executive, Wang Yong — a claim Wang denied.

In his testimony, Mr Du said: "Without Wang Yong's help, my company could not grow to this size."

The accused executives, including Australian citizen Stern Hu, were given seven to 14 years' jail time.

However, despite his admission, Du Shuanghua was able to escape from any prosecution or punishment.

"In a way, you can almost see it as one of those American legal dramas," said Peter Cai, a research fellow from the Lowy institute.

"[Mr Du had] agreed to become a key witness in a way that he probably was granted immunity from the prosecution in that particular case."

According to Mr Cai, after the high-profile bribery case, Singapore became even more attractive as a global iron ore trade hub.

There were also tax benefits to establishing a trading company in Singapore.

However, trades experts agree it is unclear why Mr Du needed to set up an opaque trust structure to trade with Australian mining companies.

"The use of subsidiaries, joint ventures and other mechanisms are commonly used in big business, including the mining industry," Dr Garrick said.

"Without doubt, laws can be improved around corporate ownership and transparency for all parties, including the public."

Secret contract continues with Rio Tinto

After he outed himself as a briber, Du Shuanghua largely disappeared from the public eye.

However, several letters of credit from the Pandora Papers leak show how Rio Tinto continued to trade with his steel companies, via Bright Ruby Resources (BRR).

The Singapore-based commodity trader was founded in December 2009, a few months after Mr Du set up his first offshore trust, Dragon Nobel, in the British Virgin Islands and appointed Credit Suisse Trust as its trustee.

Dragon Nobel is one of several offshore trusts set up by the billionaire to hold his properties, assets and shipping and steel companies.

BRR is set up to manage those assets and it is via BRR that trading has taken place with Rio Tinto.

Contractual documents and payment records contained in the Pandora Papers reveal one Rio Tinto subsidiary in Singapore struck a deal with BRR as early as 2013 and was shipping $13.5 million worth of iron ore into Chinese ports in 2016.

The ports include Rizhao, Qingdao and Lanshan, where Mr Du's steel companies are based.

These documents also reveal an Australian subsidiary of Rio Tinto based in Perth, Robe River Ore Sales Pty Ltd, was the entity that was trading the most with Du Shuanghua's BRR.

In August 2014, a $US17.5 million ($24 million) payout was transferred to Robe River via an ANZ account, with the drawee being Rizhao Steel Holding.

Other payment records also confirm Rio and BRR traded from 2014 to at least 2018, with more than $US200 million ($275 million) changing hands.

The ABC sent detailed questions to Rio Tinto, asking whether the corporation knowingly traded with Du Shuanghua and his companies after the bribery scandal, but they declined to comment.

Two controversial steel men

Other Australia-based mining companies — including BHP Billiton group and the Arrium group — are shown to have traded with Bright Ruby Resources, despite Mr Du's admission of the bribery and the associated reputational risk.

A sales and purchase contract with BHP Billiton Marketing AG, BHP's Singaporean branch, was signed in late 2014, and more than $US37 million ($51 million) worth of iron ore was sold from BHP to BRR during the following years.

BHP Billiton Mitsui Coal Pty Ltd has also received more than $US30 million ($41 million) for shipping goods, such as Queensland's Peak Downs North PCI coal from Australia to Rizhao and other cities.

Arrium Mining — now owned by controversial steel magnate Sanjeev Gupta — is also shown to have traded iron ore with Du Shuanghua's companies via Arrium entity OneSteel Manufacturing Pty Ltd.

Gupta's metals group GFG Alliance is currently under investigation from the UK's Serious Fraud Office.

A confidential sale contract was signed in May 2015 between BRR and OneSteel Manufacturing Pty Ltd, before Gupta acquired the company in 2017.

In September 2018, letters of credit of almost $US10 million ($14 million) were issued to OneSteel for purchasing OneSteel iron ore.

A GFG Alliance spokesperson told ABC in an email that "OneSteel Manufacturing does not deal with Bright Ruby Resources" at present.

It did not say whether other Arrium Group companies were still trading with BRR.

And BHP had not responded to ABC's inquiry before publication.

The ABC contacted Du Shuanghua, Bright Ruby and Rizhao Steel Holdings, but they did not respond.

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