Nationals MP Vince Catania said today that the royalty rates increase for both BHP Billiton and Rio Tinto should bolster the Royalties for Regions program, in reaction to Premier Colin Barnett's announcement yesterday that royalty fees would be increased from 3.75 percent to 5.6 percent starting July.

The new deal between the state government and the mining companies would also enable Rio Tinto and BHP to merge their iron ore operations in Pilbara, possibly preparing the stage for a proposed joint venture.

Mr Catania said that the agreement is a welcome development for Pilbara communities and especially "for the people of the Pilbara, this is possibly up to $85 million that is going to be put back into Royalties for Regions, which we all know is flowing back into the Pilbara."

He added that the expected additional revenue would fund infrastructure projects in the area and he admitted that plans for such projects are already in place and "we now can grow our plans because we know we are going to have an increase of royalty flow so this is only going to assist those towns in ensuring that when they need a specific project to be funded, we can fund it."

However, opposition leader Eric Ripper believed otherwise, saying that local governments in Pilbara would actually miss out more as a direct result of the agreement.

Mr Ripper said that the deal would keep Pilbara local governments from properly grading mining companies as he observed that Premier Barnett should have negotiated for the removal of such restrictions.

He scored Mr Barnett for his inappropriate priorities when he "put state finances at the top of the agenda while Pilbara local government finances have fallen off the bottom."

As a result of such mistake, Mr Ripper said that local governments in Pilbara are now deprived of the rates revenue that they could have gotten from very valuable mining company operations.