Barnett encourages Chinese investment in WA miners

Barnett is in China to spur on the Asian superpower to invest in a new iron ore export port at Oakajee in the state's midwest region, and met Sinosteel president Huang Tianwen on Wednesday.

Sinosteel flagged in September last year that it was in talks to invest in Australian firms including nickel and manganese miners.

At the time this development was hot on the heels of its $1.36 billion acquisition of Midwest Corporation Ltd.

That deal, a hostile takeover, was the first time a Chinese state-backed group gained control of an Australian resources company.

"I made it known that the WA state government would be supportive of Sinosteel increasing its share in other WA mining companies," Barnett said in a statement on Wednesday.

Sinosteel could increase its 5.86 per cent stake in iron ore miner Murchison Metals Ltd, which is developing the Oakajee port and associated rail through its joint venture company with Japan's Mitsubishi Corporation, Oakajee Port and Rail (OPR).

Sinosteel had previously sought to take over Murchison but was restricted by Federal Treasurer Wayne Swan in September to acquiring 49.9 per cent of the target, which has projects adjoining Midwest's.

Barnett on Wednesday said he encouraged Sinosteel to become a partner in the Oakajee project.

He said it provided "an unprecedented opportunity for a truly Western Australian-Chinese-Japanese investment collaboration".

"I am keen for Chinese companies to be involved in the construction and development of both the port and railway infrastructure," he said.

"The message was well received."

The federal and state governments each have pledged $339 million to the $3 billion development, and OPR says it has substantial internal funds.

An OPR spokesman told reporters on Wednesday the company "remains committed to Chinese participation in the project ... including in the provision of materials, equipment and financing".

"We also continue to work closely with the Western Australian Government in this process."

Barnett said China was closely monitoring the proposed merger of BHP Billiton Ltd and Rio Tinto Ltd iron ore operations in WA.

He said the collapse of the proposed investment by Aluminum Corporation of China (Chinalco) in Rio had "caused angst in China".

Barnett on Tuesday asked Shanghai Mayor Han Zheng for better consular access for detained Australian Rio Tinto executive Stern Hu and called for a speedy resolution of the matter.