The government has granted Chinese-owned Jinzhao Mining Peru the environmental permit for its proposed $1.5 billion Pampa de Pongo iron mine, estimated to produce 22.5 million tonnes per year.

The energy and mines ministry said in a statement on Friday that it had also approved the company's environmental plan for a nearby $340 million port terminal that will store and ship its iron concentrates.

The open-pit mine, scheduled to be productive for 33 years, will become Peru's biggest iron mine.

Shougang Hierro Peru, a unit of China's Shougang Group and the only other major iron mine in the Andean country, produced 6.7 million tonnes of iron in 2013.

Jinzhao is owned by China's Nanjinzhao Group Co.

(Reporting by Mitra Taj; Editing by Grant McCool)