Rio Tinto gets preliminary nod to expand Australian coal mine

SYDNEY (Reuters) - Rio Tinto (RIO.AX) (RIO.L) on Thursday came a step closer to gaining approval to expand its Warkworth coal mine in Australia after an influential panel recommended the work proceed, against the wishes of environmental and community groups.

Without a final go-ahead to expand, the mine producing electricity-generating thermal coal would by December no longer be economically viable, according to the company.

In the coming weeks, the actual approval or rejection determination will be made by a division of the New South Wales state Planning and Assessment Commission.

Generally, the commission follows the preliminary recommendation passed by an independent panel established by the state government.

An approval could help in any efforts by Rio Tinto to attract buyers for its coal mines in Australia, where high operating costs and low selling prices are weighing on profits.

In September, the company agreed to sell its 40 percent stake in the Bengalla coal mine to local operator New Hope Coal (NHC.AX)

Georgina Woods, a coordinator for the Lock the Gate Alliance in New South Wales, said the recommendation failed to take into account the wishes of the local community.

"The New South Wales government has failed to create balanced and common sense policy that protects villages, the wine-industry and endangered bushland from coal mining," Woods said.

"This short-sighted mining-at-any-cost policy is costing us a thriving, diverse and sustainable economic future for the region."

A Rio Tinto spokesman said that the expansion enjoyed widespread community support and would help retain jobs and pour money into local economies.

"Today's recommendation from the NSW Planning Assessment Commission provides a great sense of hope for the 1,300 people who work at the mine and for the hundreds of Hunter Valley businesses and community groups it supports," the spokesman said.

(Reporting by James Regan; Editing by Ed Davies)