Iluka Resources has amended its Mining Area C iron ore royalty agreements with BHP Billiton and its joint venture partners.
The royalty agreements have been in place since 1994 and the company said that the basis upon which iron ore is marketed and sold has changed significantly.
An agreement has been signed for a revised basis for the royalty determination in a bid to reflect the change.
As part of the new agreement, the royalty rate will decrease from 1.25% to 1.232%, effective from 1 July 2014.
The revision will see Iluka receiving an immediate one-off payment of $8m.
From specific tenements of BHP Billiton's Mining Area C located in the Pilbara region of Western Australia, Iluka holds an in-perpetuity royalty over iron ore that will be produced.
Mining Area C is said to be a core component of BHP Billiton's flagship Western Australian Iron Ore assets.
The assets consist of four mining hubs that are linked to an integrated supply chain and are expected to sustain operations over at least 30 years.
The internationally low-cost, long resource life Mining Area C is a high Fe quality component of BHP Billiton's iron ore assets in Western Australia.