Rio Tinto wins final approval to expand Australian coal mine

MELBOURNE (Reuters) - Rio Tinto (RIO.AX)(RIO.L) won final approval on Friday to expand its Warkworth coal mine in Australia, with strict conditions imposed by the New South Wales state government, against the protests of environmental and community groups.

The green light could help Rio Tinto attract buyers for the mine as it looks to sell down its coal stakes amid a sharp slump in coal prices and an uncertain outlook for coal demand as the world attempts to curb global warming.

The nod to extend the mine, which produces around 12 million tonnes a year of coal for power plants, means it can now continue to operate beyond December, as it had reached its originally approved boundaries.

"This approval will come as a great relief for thousands of people across Singleton and the Hunter Valley," a Rio Tinto spokesman said.

A community group that fought the expansion said it would explore legal avenues to overturn the decision. The approval included conditions such as limits on dust, noise from blasting, trucks and drills, and water supply, and would allow the mine to operate until 2036.

"We are committed to using civil disobedience, if necessary, to frustrate this expansion, both for Rio Tinto and any future buyer of the mine," John Krey, president of the Bulga Milbrodale Progress Association, said in a statement.

The government said Warkworth would produce around a tenth of the state's export coal, provide nearly 1,200 jobs on average and pay royalties of A$750 million (358 million pounds) to the state and was the biggest contributor to the regional economy.

"The commission is satisfied that the mine complex's significant benefits outweigh its potential impacts," the New South Wales state Planning and Assessment Commission said in a statement.

(Reporting by Sonali Paul; Editing by Richard Pullin)