Rio veteran Bauert takes over the reins in China

Mr Bauert has been appointed Rio's managing director for China, based in Shanghai. He was most recently managing director of sales and marketing for iron ore, based in Australia and Singapore.

But for the past six months, Mr Bauert has spent most of his time in Shanghai repairing relationship bridges for Rio. The group's relationships in China were put under severe stress last year when Rio walked away from a refinancing deal with China's state-owned Chinalco, preferring to cosy up to BHP Billiton in a proposed joint venture in the Pilbara.

Rio then led the way for the Pilbara iron ore producers to secure a much higher iron ore price than the Chinese steel industry, now the world's biggest, thought was reasonable.

All that was followed by the July arrest of Mr Hu an Australian citizen and his colleagues on charges that have since been downgraded from crimes against the state to industrial espionage and bribery.

While his new position is more senior, Mr Bauert is effectively replacing the Shanghai-based role of Anthony Loo. Mr Loo has since relocated to the US where he remains as a consultant to Rio on China and elsewhere in Asia.

Mr Bauert is a Rio veteran of more than than 30 years, a fluent Mandarin speaker, and was responsible for opening Rio's first office in China in 1983.

His appointment is the most senior for Rio in China, a country that accounts for close to 20 per cent of group sales.

Being a Chinese expert, Mr Bauert was one of the first to alert the investment community to China's seemingly insatiable appetite for Australian resources. In a 2006 presentation in Perth, he quoted a Chinese proverb, believing it to demonstrate that Rio was uniquely placed to meet China's demands, compared with the ambitions of new entrants to the industry: "You can't satisfy hunger by painting a cake."

Rio managing director Tom Albanese said Mr Bauert's appointment underlined the "importance the company places on enhancing its relationship with China".