Australian rare earths miner Lynas Corp. will likely pay some $18 million a year in royalty payments or 2.5 per cent to the Western Australian Government after the latter's amendments to its Mining Regulations of 1978.

The royalty change was contained in an amendment dated Feb. 24, posted on the West Australian government website, the Bloomberg News reported.

The 2.5 per cent tax was based on a formula that combines the market value of rare earth oxides and the number of units per hundred of REO in the rare earth elements containing-products sold, the Mineweb reported.

Lynas Corp., now in a bitter battle for the start-up operation of its beleaguered Lynas Advanced Materials Plant (LAMP) in Malaysia, has its Mount Weld rare earths mine in the state, which according to calculations by the Australian Financial Review, could be slapped $18 million annual tax, equivalent to 2.5 per cent royalty on rare earths production.

Mount Weld, the richest known rare earths deposit in the world with a mineral resource pegged at a total of 1.9 million tonnes of rare earth oxides, is located 35 kilometres south of Laverton, Western Australia. Production is expected to go on line in the second quarter of this year. It is the first new source of rare earths supply outside of China, currently the hub of the world's global supply of rare earths, at more than 95 per cent.

Lynas Corp. will concentrate the ore mined at Mount Weld in a plant located 1.5 kilometers from the mine, and then send it to the Malaysian LAMP to be processed into separated rare earth products.

Commercial shipments are expected to start with full plant ramp up operations later this year, Mineweb said.

In 2011, the Western Australia government, through the Department of Mines and Petroleum, collected over A$3.9 billion in mining royalties, according to the department's website. The funds were used for law enforcement, education, health, roads and community development programs.