The news comes as Rio Tinto prepares to face industrial action from train drivers at its Pilbara operations in Western Australia.

The announcement was delivered the same day that BHP's $132 billion hostile takeover bid for rival Rio Tinto came under renewed fire from Beijing, with a Chinese Government advisor urging European regulators to reject the proposed takeover.

Xiaoye Wang, a senior adviser to the Chinese State Council and National People's Congress told a conference at Melbourne Law School the merger would have an detrimental affect on all Asian economies, which rely heavily on iron ore imports for steel production.

"In my opinion this merger (will have) a very bad impact on China," Professor Wang said.

Train Drivers Set To Strike

Rio Tinto faces the first industrial action at its Pilbara operations in Western Australia since 1992 when its train drivers are expected to walk off the job for 12 hours on Saturday.

The company's 39 train drivers are expected vote in favour of the work stoppage at a Construction, Forestry, Mining and Energy Union meeting late on Monday night, mining division secretary Gary Wood said.

The drivers are seeking an annual pay rise of 4.75 per cent and $20,000 a year for employees affected by Rio's plans to introduce driverless trains at its Pilbara operations by 2012.

Rio announced the ambitious automation plans in January, whereby its Pilbara mines would be controlled from a new centre in Perth, about 1,300 kilometres from the miner's railways.

Mr Wood said the union would have preferred to negotiate an outcome with Rio to avoid industrial action but the company had not responded to a written request to meet and discuss the matter.

He said that under the Workplace Relations Act, the union had to provide three days notice of industrial action, so the soonest a 12-hour work stoppage could commence was Saturday morning.

"If we were to take industrial action for Saturday this week, we would have to advise them of that tomorrow morning," Mr Wood said.

"We would have preferred to come to the table and negotiate rather than having to resort to having stoppages.

"Because the Workplace Relations Act is obviously deficient and doesn't allow for arbitration, we're really left with no other option but to try to force them to come to the table - something they've refused to do for the last three months."

"Then there is the issue of a $20,000 allowance, which they get paid for driving on the main rail line, but if they revert to driverless trains and those people are restricted to guard work, it could mean a $20,000 reduction in earnings," Mr Wood.

"We want it rolled into their base salary, so there are no changes as a result of introducing new technology.

"Those are the primary issues we want dealt with."

A Rio Tinto spokesman said he hoped industrial action could be avoided.

"We haven't lost a day since adopting direct engagement (with employees) in 1992," the spokesman said.

"It would be a shame if that record were to be spoiled."