Leading mining Companies, Rio Tinto and BHP Billiton have agreed to increase the royalty payments to the Western Australia Government. This will ensure that the Government receives an additional $340 million, every year.

The news was confirmed by Western Australian Premier, Colin Barnett. As per the new deal, Rio Tinto and BHP Billiton will be paying an increased royalty of 5.6% as compared to the earlier 3.75% of sales revenue. These will be applicable form July 1.

It will also lead to another joint venture in the Pilbara region. Both these Companies have been paying the current concessional rates since the mining industry was set up in the 1960s. 

It will also ensure that these Companies will share their railways and port facilities apart from also blending their iron ore. Barnett agreed that the deal will benefit all the stake holders and will also benefit Western Australia State. 

Both these Companies will also make a onetime payment of $350 million. The payment will be kept in a trust and will be spent on the development of a new children’s hospital in Perth.   

The Premier will be introducing two new bills in the state Parliament next week to amend the existing legislation.

The deal will lead to an additional $1.06 billion in the next four years for Western Australia.