June 21, 2019 / 8:33 AM / 3 months ago

UPDATE 1-S.Korean firm wins mining leases for long-delayed Australian coal project

* Mine under review for more than a decade

* KORES aims to start production by early 2023

* Coal most likely headed to South East Asia (Adds green group comment)

By Sonali Paul

MELBOURNE, June 21 (Reuters) - An Australian state on Friday granted mining leases for a coal mine controlled by Korea Resources Corp (KORES), clearing the way for a project that green groups and some local communities have battled for more than a decade.

The final approval from the New South Wales (NSW) state government follows a surprise victory for the pro-coal conservative government in an Australian election in which climate change had been a key issue.

“The project involves a capital investment of over A$800 million ($554 million) and will create more than 1,700 direct and indirect jobs,” the state’s government said in a statement on the mining lease approval on Friday.

The election outcome has put pressure on state governments that had been opposed to new coal mines to clear the way for projects that have long been held up, to create new jobs.

“This is a very positive sign that the recently re-elected NSW Government is serious about backing regional jobs and investment during the term of this Parliament,” said New South Wales Minerals Council Chief Executive Stephen Galilee.

Neighbouring Queensland state last week cleared the way for Indian conglomerate Adani Enterprises’ Carmichael mine.

KORES, leading the Wyong Areas Coal Joint Venture, plans to dig an underground mine to produce up to 5 million tonnes a year of thermal coal for power stations over 28 years, aiming to start production in late 2022 or early 2023, project manager Kenny Barry said.

“We were very pleased with today’s outcome, following what’s been a very exhaustive evaluation process over a number of years,” Barry told Reuters.

He predicted that most of the coal would be exported to Southeast Asian nations, but said some could go to local power stations.

The Wallarah 2 coal project won environmental approval in January 2018, with strict measures to prevent damage to local drinking water, a major issue raised by the project’s opponents.

“We think New South Wales will rue the day it approved this mine which is going to be built under the drinking water catchment of one of our fastest growing regions,” said Georgina Woods, a spokeswoman for Lock the Gate Alliance, an environmental group.

She said the mining lease grant had been inevitable after the state’s independent planning commission approved the project last year.

$1 = 1.4447 Australian dollars Reporting by Sonali Paul; Editing by Joseph Radford and Sherry Jacob-Phillips

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