Australia government approves new uranium mine

CANBERRA (Reuters) - Australia's government approved on Tuesday the development of a new uranium mine in South Australia state with strict environmental conditions.

Environment Minister Peter Garrett said he had approved the Four Mile uranium mine, owned by Quasar Resources Pty Ltd, which aims to be the third largest in Australia in production terms and lift exports by $157 million a year.

"Following this thorough assessment and careful consideration, I am certain this operation poses no credible risk to the environment," Garrett said.

The Four Mile deposit is expected to produce around three million pounds of uranium oxide a year. The project, in which Alliance Resources has a 25 percent stake, is expected to have a 10-year lifespan.

Alliance's shares rose 15 percent to A$0.73 on Tuesday.

The mine, proposed to start production in January 2010, will employ the leach-mining method used at the adjacent Beverley uranium mine, operated by Quasar affiliate Heathgate Resources.

Garrett said conditions on the mine's approval included a rigorous environmental monitoring regime to remain in place well after the mine ceased operation.

Russia, China and India are all keen to buy Australian uranium to develop civilian nuclear energy. Australia has 40 percent of the world's recoverable uranium.

The Labor government is refusing to sell nuclear fuel to India because it has not signed the Nuclear Non-Proliferation treaty. Australia is one of 35 International Atomic Energy Agency board members and already sells uranium to 36 nations.

($1=1.274 Australian Dollar)

(Reporting by Rob Taylor; Editing by James Thornhill)