Western Australia State Premier Colin Barnett said Wednesday he will receive formal notification within a few days of BHP Billiton Ltd. (BHP.AU) and Rio Tinto Ltd.'s (RIO.AU) plans to merge their iron ore assets in the Pilbara region of Northwest Australia.

Barnett, who met recently with BHP Chief Executive Marius Kloppers, also said that BHP and Rio will negotiate with the state on royalties.

The proposed deal, which will combine the two miners' facilities, was announced in June after the collapse of Aluminum Corp. of China's, or Chinalco's, bid to take a larger stake in Rio.

"We have agreed that we will meet every two months on the proposed BHP-Rio merger of their iron ore and other operations," Barnett told reporters.

The BHP chief executive "told me that he would be providing me with a formal notification of their plans in the next few days and I guess that will trigger the process of looking at royalties, of stamp duty on the transfer, also access to the rail infrastructure and the like and the modernization of state agreements, all of that will probably take six to twelve months to complete."

On the issue of concessional royalties, Barnett said "there is a willingness to negotiate because basically BHP, Rio Tinto have no choice, they must."

-By Cynthia Koons, Dow Jones Newswires; 61-2-8272-4691; cynthia.koons@dowjones.com