The Parliament of Western Australia has approved legislation to raise royalty rates for iron ore miners including BHP Billiton and Rio Tinto.

According to the law, the companies will have to pay 5.6% instead of 3.75% of sales revenue.

The royalty increase is expected to contribute $340m in revenue to the government this financial year, reports ABC News.

The companies had been paying a concessional rate since the 1960s when the industry was established.