Rio boss flags BHP merger's benefits

According to Mr Albanese, Perth would be holding an international economic conference whereby China is expected to require more iron ore in the next 4 years as compared to what Western Australia had ever produced in its entire history.

Earlier this year, Rio turned its back from a deal with Chinalco, a Chinese firm as it announced a proposal for a merger with BHP.

He commented that combined output would be greatly improved with the merging of Rio and BHP's assets.

Also, with the joint venture, the iron ore assets of West Australia would be brought together for both companies.

In addition to that, with these two working together, under a joint venture framework, they would be better positioned for future demand growth and this will capture significant synergies for their shareholders.

Mr Albanese stated that to avoid risking losing billions of dollars, Western Australia would need to make sure that it maintains a healthy and good working relationship with China.

Besides, WA mining operations would need to bear the responsibility to ensure that they are capable of fulfilling Chinese demands.

This is due to the fact that China has huge commodity needs for the future and it will be buying and developing assets which are in competition with Australia if they fail to gain and encourage their investment here in Australia which includes Western Australia.