The West Australian Premier is satisfied with the results of the royalties deal with two giant Australian iron ore miners.

Mining giants Rio Tinto and BHP Billiton have agreed to pay for iron ore royalties to $340 million a year in Western Australia.

Premier Colin Barnett announced earlier today that he has signed a new deal with both companies that should give them a go-signal to push through with the joint venture in the Pilbara region.

Starting in July 1, the companies will start paying a royalty fee of 5.6 per cent instead of 3.75 per cent of sales venue.

Both mining firms were paying a concessional rate when the industry was first established in the 1960's.

Mr. Barnett said the contract allows both mining groups to share the use of their railways and port facilities, including combining their iron ore.

"The state will collect in the coming financial year - 2010 to 2011 - an additional $340 million in iron ore royalty payments," he said.

BHP Billiton and Rio Tinto agreed to make a one-off payment of $350 million for a trust fund in a new Perth children's hospital.

The West Australian Premier said he will introduce two new bills to the parliament next week to revise the current legislation.

"I think it demonstrates to West Australians that the state government does own these resources on their behalf and that it is possible to get good results through well conducted, professional negotiations done with good will on both sides," Colin Barnett said.