Australia, Queensland Governments Clash Over Coal Mine Project Approval

Australia's federal government has again clashed with state officials in eastern Queensland state over approval for a major mining project, warning Friday of delays to a 6.4 billion Australian dollar (US$6.2 billion) coal development if it's forced to duplicate an environmental review.

Environment Minister Tony Burke in a statement warned that he was being asked to make a decision within 30 days on the Alpha Coal project based on what he said is an incomplete report from the state that didn't fully address environmental issues.

"Because the Queensland government has not provided a sound assessment, I will be required to obtain the information that Queensland has failed to provide," Mr. Burke said. "This will result in unnecessary and costly delays for the project."

The minister said he had until this week--when Queensland Deputy Premier Jeff Seeney approved the development of the project in the Galilee Basin--understood that the state was considering reopening the review process to avoid duplicating the environmental assessment process.

Mr. Seeney in reply accused Mr. Burke of "playing politics" and said Queensland's coordinator-general had carried out an extensive review of the project's environment impact assessment.

The dispute is just the latest clash between the federal Labor Party and the recently elected Liberal National Party in Queensland. Mr. Seeney last month approved the US$1.5 billion expansion of Rio Tinto PLC's (RIO) bauxite mining operations in the state, despite Mr. Burke's insistence that the effect of expanded shipping on the Great Barrier Reef be assessed before the final go-ahead is given by the federal government.

Billionaire Gina Rhinehart's Hancock Prospecting Pty. Ltd., which sold a 79% stake in Alpha to India's GVK Group as part of a wider deal agreed on last year, has planned for construction to begin next year on a mine able to produce 30 million metric tons a year of thermal coal.

Mr. Seeney said Tuesday that its approval for the project came with 128 conditions that aimed to mitigate the environmental impact of the coal mine, which would comprise six separate open-cut pits. He estimated there would be a A$11 billion boost to the country's economy during the three-year construction phase, most of which would be retained in Queensland, and an A$80 billion rise in exports over the estimated 30-year life of the mine.

Write to Robb M. Stewart at robb.stewart@dowjones.com