Sudanese rebel forces released 29 Chinese workers kidnapped 10 days ago in the main oil-producing state of South Kordofan, where the army has been fighting insurgents for seven months, Sudan's foreign ministry said on Tuesday.
The incident had been an embarrassment for the Sudanese government, which is trying to boost investment from China, its main political and trade ally, as it seeks to overcome a severe economic crisis.
Caught up in a dispute
But the workers had apparently become caught up in a dispute between Khartoum and rebels who are trying to attract attention to the plight of 417,000 civilians who have fled fighting in South Kordofan and Blue Nile, another Sudanese border state.
"The Sudanese foreign ministry affirms to the government and people of China that Sudan's government seeks to protect Chinese investments and workers involved in it," a ministry statement said.
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SPLM-North rebel spokesman Arnu Ngutulu Lodi and an ICRC official in Khartoum declined to comment.
Top officials of the SPLM-North last week met Chinese officials in Ethiopia.
Both Sudanese border states are home to large communities who used to side with the South during decades of civil war with Khartoum and now complain of marginalisation after Juba became independent in July under a peace deal.
The SPLM is now the ruling party in the independent south and denies supporting SPLM-North rebels across the border, as Khartoum says.
China is an ally of both north and south and the main buyer of South Sudanese oil as well the biggest investor in Sudan.
Western diplomats say China has the best chance of defusing tensions between Khartoum and Juba, which are locked in a row over sharing oil wealth, dividing up debt and ending violence on both sides of their joint.
Under Chinese pressure
The kidnap was the third abduction of Chinese people in Sudan since 2004 and highlighted the risks to China's expansion in Africa in search of minerals and energy.
Beijing had faced immense pressure to secure the safe return of the abducted workers. State-owned newspapers called for more protection for China's overseas workers as the world's second-largest economy expands its investments around the globe.
The workers belonged to state-owned Sinohydro Corporation, a hydropower engineering and construction company.
A total of 47 Chinese workers were present when the SPLM-North rebels originally attacked. Eighteen fled and one was killed after a rescue attempt, according to Chinese media.
Khartoum counts on China to boost investment as it seeks to overcome the loss of three-quarters of its oil production to South Sudan when it became independent under a 2005 peace agreement ending the civil war with Khartoum.
Most Western firms shun Sudan due to a US trade embargo imposed first in 1997 when Khartoum was hosting prominent militants such as Osama bin Laden.
SPLM-North is one of a number of rebel movements in underdeveloped border areas who say they are fighting to overthrow Sudanese President Omar Hassan al-Bashirand end what they see as the dominance of the Khartoum political elite.
(Writing by Ulf Laessing and Sui-Lee Wee, Editing by Ron Popeski)